Netflix Records Surge in Sign-ups After Restricting Users From Sharing Passwords

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At the close of last year, Netflix experienced a surge in sign-ups as customers, motivated by the company's efforts to clamp down on password-sharing, transitioned to creating individual accounts.

 During the three months ending in December, the streaming behemoth witnessed an addition of over 13.1 million subscriptions, marking the highest quarter of growth since 2020, extending the growth trajectory that commenced the prior year. 

Related To This: Netflix Removes Indian Film Amid Controversy Over Religious Sentiments

Expressing confidence in its growth trajectory, Netflix announced plans to raise prices, signaling a return to its standard approach after having deprioritized price increases during the implementation of paid sharing. Co-chief executive Greg Peters conveyed this sentiment during a call with analysts to discuss the latest quarterly update, emphasizing a "back to business as usual" sentiment.

Interestingly, a considerable number of new members opted for the company's most economical plan, displaying little concern over potential exposure to advertisements. In fact, in the 12 countries where ad-supported plans were offered — including significant markets such as the UK and US — this plan accounted for 40% of the new sign-ups.

This trend represents an ironic turn of events for a company that had long resisted incorporating ads into its platform, citing concerns about compromising the viewer experience, complicating its business with privacy risks, and other associated issues.

Following an unexpected subscriber decline and profit decrease in the first half of 2022, Netflix has been exploring new avenues to attract new viewers and generate additional revenue. In addition to implementing ad-supported plans and the crackdown on password-sharing, the platform is experimenting with live events to expand its audience base.

Recent noteworthy developments include a long-term $5 billion deal to feature WWE Raw on the platform, marking a strategic move to diversify its content offerings. This initiative, in combination with subscription revenues, has the potential to contribute to the overall revenue per account.

READ ALSO: Burna Boy to Perform at 2024 Grammys

Despite skepticism around advertising contributing significantly to growth in the current year, the company's recent programmatic strides have been met with enthusiasm on Wall Street. This momentum is further supported by Netflix's recent announcement of a substantial increase in accounts opting for ad-supported plans, showcasing strong user traction for this model.

Netflix's robust content lineup, featuring hits like the Beckham documentary series and Adam Sandler's Leo, propelled the platform to receive 18 Oscar nominations, including "Best Picture" for Maestro starring Bradley Cooper and Carey Mulligan. This success drove shares to surge more than 6% in after-hours trade.

For the year 2023, Netflix reported more than $33.7 billion in revenue, marking a notable uptick of over 6% from the previous year, with profits reaching $5.4 billion, compared to $4.49 billion in the preceding year.

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