The rise of Netflix’s subscribers in the midst of writers’ and actor’s frustrations: The impact of the Netflix crackdown on password sharing
Disney, Paramount, and Warner Bros. Discovery have all recently raised their own streaming prices, so this is not out of step with the industry. The less services people want to pay for, the more streamers will raise their prices.
This year’s subscriber inroads have been made despite entertainment labor strife centered in part on writers’ and actors’ complaints about unfairly low payments doled out by video streaming services such as Netflix. The company has been able to continue production despite the recent writers’ strike by drawing upon the already finished TV series and movies already in production in the U.S.
The company added nearly 8.8 million worldwide subscribers during the July-September period, more than tripling the number gained during the same time last year when Netflix was scrambling to recover from a downturn in customers during the first half last year. The increase left Netflix with more subscribers than expected, at about 243.8 million.
Consider the company’s crackdown on password sharing. The killjoy campaign was launched in the US and UK in May. It came on the heels of a topsy-turvy time for streaming, when Netflix was facing increased competition from new streamers like Disney+ and HBO Max (now known as Max) and losing subscribers for the first time in a decade. The move to quash password-sharing—which basically shut out users who didn’t appear to live in the same household as the account holder—also landed shortly after the streamer pushed its much-hyped $7-per-month ad-supported tier.
The company’s stock price soared more than 12% in extended trading after the latest quarterly numbers came out. Netflix shares have increased by about 30% so far this year amid mounting evidence its video streaming service is faring better than most in a crowded fielded of competitors that is testing the financial limits of many households.
In an apparent effort to rebuild its library of original programming after everyone returns to work, Netflix said it expects to spend about $17 billion on TV series and films next year.
Password Sharing Crackdown, Video Advertising and the Revenue Potential of the U.S. Consumers: A Case Study of Cheruvu and Purdy
The apparent success of the password-sharing crackdown could now free management to focus on other ways to bring in more revenue, such as a low-priced option that includes advertising introduced a year ago.
“I think the advertising potential of the company is overlooked,” Cheruvu said. The engagement with the video advertising could be more than that of a social media platform.
“The ‘streamflation’ era is upon us, and consumers should expect to be hit with price hikes, password sharing limits, and enticed with ad supported options,” said Scott Purdy, U.S. media leader for KPMG.
