Netflix is expected to report its slowest subscriber growth in the last one and a half years, as the initial surge from its password-sharing crackdown fades.
When Netflix first launched its crackdown on password sharing, it saw a significant boost in new subscribers, as many people who had previously been sharing accounts decided to sign up for their own subscriptions.
This initial surge in subscribers was a positive result for Netflix, as it brought in new paying users who were previously taking advantage of shared accounts.
However, as time has passed, the impact of this crackdown has diminished. As a result, the rate of subscriber growth has slowed down significantly.
According to reports, Netflix added around 4 million subscribers in the third quarter of 2024. This marks a significant decline compared to previous quarters, signalling that the surge from cracking down on shared accounts is fading.
Popular titles like “The Accident” and “The Perfect Couple” contributed to retaining subscribers but weren’t enough to maintain the rapid growth seen earlier.
This slowdown in growth means that Netflix is no longer benefiting as much from the crackdown as it did in the earlier phases. Investors are now focusing on Netflix’s ability to leverage its advertising business for future growth.
Naijaonpoint reported that Netflix added 8.05 million new paid subscribers in the second quarter of 2024.
This solid performance follows the company’s highest-ever earnings recorded in the first quarter, showcasing its resilience and ability to attract new subscribers amid a competitive landscape.
As the rate of new sign-ups decreases, Netflix is pivoting to other performance measures, such as revenue growth and profit margins, to assure investors.
Jeff Wlodarczak, an analyst at Pivotal Research, explained, “Their focus is to continue growing subscribers at a healthy rate while using their large scale to raise prices and increase advertising revenue.”