A year ago today, Netflix reported its largest quarterly loss ever, with 970,000 subscribers dropping the service. The company has since crawled out from under the rubble. Netflix revealed Wednesday that, for the second quarter of 2023, the streaming giant saw a jump (or should we say leap) in 5.9 million global subscribers, bringing the total to 238.4 million subs.
The subscriber addition far exceeds industry guidance; analysts forecasted an increase of 1.7 million subs. Netflix ended Q1 with 232.5 million users.
Netflix’s quarterly earnings results arrive a few hours after news broke out that the streamer dropped its basic plan in the U.S. and the U.K.
New subscribers can no longer pay $9.99 or £6.99/month for Netflix without ads and instead must cough up $15.99 or £10.99 for the standard plan. Users can also downgrade to the ad-supported tier which costs $6.99 or £4.99 per month. Netflix pulled the same move for new subs in Canada last month when it quietly axed its $9.99 CAD basic plan.
The removal of the basic plan is just another money-grubbing ploy made by Netflix as it tries to boost its revenue. For instance, the company recently launched its paid sharing rules in the U.S., which prohibits members from sharing their accounts with users outside their households for free. Members now have to pay $7.99/month for an additional membership.
Netflix’s significant subscriber gain this quarter reflects the impact of its paid sharing rules. Netflix wrote in its letter to shareholders, “In May, we successfully launched paid sharing in 100+ countries, representing more than 80% of our revenue base.” The company added that today it’s rolling out paid sharing to “almost all the remaining countries,” including Croatia, Kenya, Indonesia and India.
TechCrunch previously covered the streamer’s success with the launch of the extra member feature, citing a report from Antenna that revealed Netflix gained nearly 100,000 daily sign-ups following the password crackdown.
Moreover, Netflix’s ad-supported tier gives the company an additional revenue stream since it collects money from advertisers for every viewer. Netflix revealed during its first Upfront presentation that its ad plan has nearly five million monthly active users. In a recent Antenna report, 17% to 20% of new Netflix sign-ups during the second quarter were for its ad-supported tier.
Netflix reported $8.2 billion in revenue and a net income of $1.5 billion.
This story is developing…
