After a turbulent 2022, Netflix was able to increase subscriber additions majorly in Q2 and Q3 of 2023. The streaming service added 5.9 million paid subscriptions worldwide between March and June and a whopping 8.8 million from July to September. The company's crackdown on account-sharing in these quarters led to new accounts created, mostly in the U.S., Canada and the EMEA region. An earlier roll-out of the new rule - that a single account can only be watched in one household at a time unless paid outside users are added - had backfired in Latin America, which dampened subscriber growth that quarter. Netflix also lost 1 million subscribers in Spain, where the rule was also tested in Q1, according to Kantar. Similar reactions at the same time were recorded in Portugal, Canada and New Zealand.
Netflix still went ahead with the crackdown in its major markets, which seems to have paid off. The newest subscriber increase, announced yesterday, was the biggest Netflix could managed since the first quarters of the pandemic, when stay-at-home orders made subscriptions soar. Revenue in the past quarter was up 7.8 percent - slight above the forecast - to $8.5 billion.
Additional fees for up to two account users not situated in the account holder's household are now being asked for in more than 100 countries, according to company statements. Although the streaming service didn't release any concrete figures, the current letter to shareholders mentions the company was "focused on improving monetization through a combination of paid sharing, scaling our ads business and increased sophistication around our pricing and plans". Overall, Netflix now boasts around 247 million subscribers worldwide. New price hikes were announced for two subscription plans in the U.S., the UK and France. The increases has previously been leaked by The Wall Street Journal.
With paid sharing having been rolled out in almost every market and all signs pointing to a positive development for the rest of the year, the company is optimistic in its forecast for Q4 2023. Revenue is expected to be up 11 percent year-over-year, while subscriber numbers are expected to increase by roughly the same amount as in Q3 2023. Netflix's share price went up by 12 percent after the new earnings were posted.
