Netflix's genius move that gained them 21,900,000 new subscribers despite password sharing ban
It's a gamble that continues to pay off
Your choice of streaming service is important.
When you've got Max boasting the mushroom madness of The Last of Us, Amazon getting bloody with The Boys, and Disney+ taking you to the galaxy far, far away with Skeleton Crew, it's hard to decide where to spend your dollars.
In a climate where you might also be paying for Spotify Premium and YouTube Premium, most simply can't afford to keep up with all the streaming services.
Despite its ups and downs, Netflix remains the undisputed sovereign of streaming, boasting original shows like Stranger Things, Black Mirror, Baby Reindeer, Monsters: The Lyle and Erik Menendez Story, and more.
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There were worries that Netflix clamping down on password sharing would hit the streaming giant hard in the pocket, but instead of a mass exodus to rivals, it seems that users dug deep and helped the platform grow.
As shared on X by Alex Penunuri, Netflix basked in expanded growth in the aftermath of its password crackdown. Netflix estimated that some 100 million households were watching under someone else's password, meaning that's 100 million homes watching for free.
Considering the standard ad-free version of Netflix is currently priced at $15.49 a month, that's a whopping $1.5 billion a month down the drain. Even with the $6.99 ad tier, that's billions a year.
With the rise of Disney and HBO’s streaming services, Netflix's growth had also slowed in 2023, meaning drastic action had to be taken.
Although there was vocal backlash online and Netflix became a viral meme as many assumed this would be the end, execs had two clever tricks up their sleeve.
Launching the crackdown in the middle of 2023, there was a bumper crop of releases and it was a time when people typically had more time to binge.
Back then, Netflix's summer 2023 showcase included major releases like Queen Charlotte: A Bridgerton Story, Extraction 2, and The Witcher season 3.
With fear of FOMO, the anti-password sharing measures led to the highest number of paid sign-ups since 2020 - during a pandemic peak.
Now that you were no longer sharing accounts, Netflix's algorithm was able to shine by suggesting shows that you would actually want to watch, while the addition of the 'Add Extra Member' feature was a stroke of genius that accounted for 30% of its new sign-ups in the next quarter.
Despite Netflix's naysayers, it added 21.9 million subscribers in the last six months of 2023, revenue climbed to $18.6 billion, and most forgot what they were angry about in the first place.
The Netflix model clearly worked, as not long after, the House of Mouse has followed suit with its own crusade against password sharing.
Even though prices continue to climb and there will always be critics, the fact Netflix added another 22.4 million subscribers in the first nine months of 2024 proves that this is one gamble that continues to pay off.