Shares in Netflix, Inc. (NASDAQ: NFLX) surged 3.88% in the opening hours trade Wednesday as the latest data from research firm Antenna revealed that Netflix signups in the United States remained steady despite a dip from a June all-time high. This development comes after the video streaming giant implemented a crackdown on shared passwords back in May, which was initially thought to impact its user base.
Netflix, Inc. (NASDAQ: NFLX), which once proclaimed “Love is sharing a password” on X (formerly known as Twitter) in 2017, initiated a global crackdown on password-sharing. This strategic move hints at its drive to tap into new revenue sources within an increasingly competitive and saturated market.
In the face of abundant choices available to consumers like Walt Disney’s streaming service, Amazon.com’s Amazon Prime Video, and Warner Bros Discovery’s Max, attracting new subscribers and retaining the loyalty of existing ones has become a formidable challenge in recent years.
Wall Street had initially voiced concerns that cracking down on password-sharing might hinder subscriber growth. Nevertheless, Netflix’s resolute action has breathed new life into its user acquisition efforts.
The recent data from Antenna reveals that Netflix observed a 25.7% decrease in gross subscriber additions in July compared to the previous month, following a more than twofold surge in signups seen in June. Despite this dip, the 2.6 million gross additions in July remained notably higher than the baseline.
Notably, Netflix had signaled its intentions last year to curtail account-sharing, and it had been experimenting with different strategies in select markets. The company estimated that over 100 million households had generously shared their login credentials with friends and family beyond their residences. This has led analysts to anticipate that approximately 50 million users will eventually opt for individual accounts.
Interestingly, Antenna’s data unveils that approximately 23% of new users who joined in July opted for the more affordable ad-supported Netflix plan, marking the highest adoption rate since the plan’s launch in November. This reflects a 4 percent increase from the previous month.
Antenna gathers its streaming data from various sources, including transaction records such as online purchase receipts and banking information.
Mark Glenn is a financial journalist and breaking news reporter for ABBO News. Mark is known for his ability to deliver real-time news updates on market developments, mergers and acquisitions, corporate earnings reports, and regulatory changes, helping investors stay informed and make sound financial decisions.
