Netflix’s recent crackdown on password sharing is believed to have boosted its subscriber count by a staggering 6 million during the third quarter, raising eyebrows throughout the streaming industry.
Password sharing crackdown
As anticipation builds for the impending earnings report to be disclosed this Wednesday, the market watches closely, wondering whether Netflix is primed to usher in higher subscription fees.
Netflix, often touted as the only major streaming platform turning a profit, has charted a distinctive course by refusing to follow competitors such as Walt Disney in increasing ad-free fees this year.
Instead, they’ve focused on curbing password sharing outside of registered households, targeting the vast pool of over 100 million people who enjoy their services without officially subscribing.
Analysts at Bernstein have observed that Netflix is increasingly resembling a utility in many markets, highlighting the unique challenges this poses for a matured company in its pursuit of sustained growth. The metamorphosis into a utility-like entity prompts profound questions about how Netflix will continue to innovate and expand its market presence.
Continuous growth for Netflix
Additionally, analysts said that the majority of new Netflix subscribers who joined the platform in response to the password crackdown have chosen ad-free subscription plans. Ross Benes, an analyst at Insider Intelligence, anticipates that by employing these strategies, Netflix is poised to double its audience for ad-supported content in the coming year. He foresees Netflix gradually increasing its ad offerings to users, bringing it in line with its competitors.
In general, LSEG data indicates that Wall Street anticipates the streaming service to report its most robust quarterly increase in subscribers for this year. The third-quarter revenue is expected to have increased by 7.7% to $8.54 billion, marking the swiftest growth in five quarters, driven by compelling content offerings such as the latest seasons of “Sex Education” and “Virgin River.”
Potential price hikes
The intrigue surrounding Netflix’s future takes an intriguing twist with recent media speculations that the streaming giant may consider implementing price hikes following the resolution of the Hollywood actor’s strike. As Netflix’s influence in the industry deepens, all eyes are on the forthcoming earnings report, which promises to shed light on the streaming pioneer’s strategies for the future.
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