January 29th 2024
Curb on password sharing boosts Netflix numbers
Ban on users sharing access to streaming site and cheaper plans with adverts leads to huge rise in subscribers in the last three months of 2023.
Netflix was founded in 2007 as a mail order rental service for DVDs – hey, remember those? It quickly moved into online streaming, and really gained ground in the US and abroad by producing its own hit shows, such as Stranger Things and The Crown. The streaming service was already enjoying huge success when the Covid pandemic hit, and lockdown meant we were all stuck at home and in need of entertainment.
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Given the huge growth of Netflix, other streaming services such as Disney+ have followed in its wake. But that meant more competition. The Crown has now finished and Stranger Things is due for one last series that has not yet begun production. There have been other Netflix hits but some media reports have suggested that there was not enough, and often enough, to keep subscribers hooked. Then there has been the cost of living crisis.
In 2022, Netflix continued to see an increase in its worldwide subscribers, but the additional 8.9m, was negligible growth compared to previous years. This suggested that streaming might have hits its peak – and had perhaps even begun an inexorable downward trend.
Netflix took action in May 2023 to ban password sharing by users, which enabled people in multiple households to access the streaming service while paying a single subscription. It also introduced a new, cheaper subscription deals with programming that features adverts. Concerns had been raised that these changes would only exacerbate the fall. However, the strategy seems to have worked.
Over the three-month period between July and September 2023, worldwide subscribers increased by 8.8m – almost as much as for the whole of 2022. Between October and December, the number increased by a further 13.1m.
In all, 2023 saw a rise of nearly 30m Netflix subscribers, with a worldwide total of more than 260m.
According to Netflix, 40% of new subscribers take the cheapest, advert-inclusive plan, in countries such as the UK and US where that option is available. In the UK, this standard plan costs £4.99 per month. A subscription without adverts costs £10.99 and the premium plan is £17.99. The majority of new subscribers sign up to these more expensive deals.
Greg Peters, Co-Chief Executive at Netflix, says the ban on password sharing is the key to the change in fortunes, and that it, ‘will improve our growth for years.’
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