Netflix said it increased profits and increased subscriber count on the platform in the second quarter of 2023. Streaming reported Wednesday (7/19) a net income of $1.8 billion for the quarter, an increase of 3 .3%. compared to the same period last year. The number exceeded the company’s expectations, which projected a peak profit of $1.5 billion.
The increase was achieved thanks to the acquisition of 5.9 million new subscribers, for a total of 238.4 million subscribers worldwide.
shared passwords
The growth has been a consequence of some changes implemented recently. One of them is the charge for shared passwords. According to Netflix, the change hasn’t reduced the number of subscribers on the platform, as many have pointed out on social media. On the contrary.
Applied in Brazil since May, the strategy makes a Netflix account limited to residents of a single household only, imposing an additional payment for users away from home. This forces anyone who wants to share the password to either pay more, or have the aggregate open their own individual account. Many of the new subscribers may have emerged from this impasse.
Advertising
In addition to the new tactic, the company has also noticed the effects of its ad-supported subscription plans, which have been implemented since late 2022. As a cheaper option, the new plans bring advertising before and during content playback and generate double profit. with subscribers and advertisers.
With the positive result, Netflix decided to terminate its basic ad-free subscription plans in the US and UK earlier this week. In this way, the platform forces users who prefer to watch series and movies without ads to subscribe to a more expensive plan.
“Building an advertising business from the ground up isn’t easy and we have a lot of work ahead of us, but we are confident that over time we can transform advertising into a multi-billion dollar source of incremental revenue,” the company’s report said. .
competition
Netflix’s triumph comes at a time when its main competitors, such as Disney, Paramount and Warner Bros. Discovery, recorded losses and search for alternatives to monetize their streaming services.
While Netflix looked for solutions to charge for passwords and advertising plans, Disney+ decided to withdraw titles from its catalog and cut investments in productions. Max has already started selling his content to other platforms, such as Netflix itself.
“Although streaming is fiercely competitive, we’ve shown that with strong execution and focus, it can be a great deal,” said Greg Peters, Netflix co-CEO. “I think you’re absolutely right that the overall market is weak, but right now we benefit from being relatively small.”
Hearing Disclosure
Another aspect highlighted by the report was how the way to disclose the viewing data of the titles, with the Top 10 on the platform itself, increases streaming engagement with the audience – and with the market. In parallel, the continuous flow of new films and series also contributes to this dynamic.
“We believe sharing this engagement data on a regular basis helps talent and the industry at large understand what success looks like on Netflix, and we hope other streaming services become more transparent about engagement on their services over time.” added the executive. .
strikes
With the report, Netflix was the first Hollywood studio to report earnings amid actor and writer strikes. The two movements were the result of failed agreements between the unions (SAG for actors and WGA for screenwriters) with the Film and Television Producers Alliance (AMPTP), which brings together major studios such as Amazon, Apple, Disney, Warner, NBC Universal , Paramount, Sony and even Netflix.
With productions halted, streaming has even increased the estimate of free cash flow, a metric used to evaluate how much money a company has left after it has met all financial obligations. By decreasing spending on content, the company saved $1.5 billion, for a total of $5 billion for the full year.
During a statement this Wednesday (7/19), Streaming Co-CEO Ted Sarandos commented on the company’s stance on the situation. “Let me start by making one thing clear: this strike is not a result we wanted,” he said. “We make deals all the time, we’re constantly negotiating with writers and directors and actors and producers and everyone involved in the industry. And we’re really hoping to get a deal now.”
“No one here, no one within the AMPTP and I’m sure no one at SAG or the WGA has taken this lightly,” he added. “We have a lot of work to do. There are some thorny issues. We are fully committed to reaching an agreement as soon as possible, an agreement that is fair and allows the industry and all its members to move towards the future.”
Source: Terra
Ashley Fitzgerald is a journalist and author at Gossipify, known for her coverage of famous people and their lives. She writes about a wide range of topics, including celebrities, influencers, social media stars, and public figures. Her articles are known for their in-depth analysis and unique perspective. She is respected for her ability to keep readers up to date with the latest news and trends of the famous people.
