After Netflix implemented their dreaded password-sharing crackdown, which meant that an account on the streaming service could only be linked to one household, the company has reported record profits. Of course, driving revenue was the main inspiration behind the crackdown on password sharing, and it seems to have worked like a charm.
Sharing their profits for the first quarter of 2024, the company reported earnings of £1.85billion, alongside a sharp increase in subscriber numbers. Apparently, upwards of 9.3million people have signed up to Netflix in the last four months, meaning the service now has around 270million subscribers all-in-all.
Despite these record highs, both in users and profits, the company has made the decision to move away from measuring success in user numbers. Writing to their shareholders, Netflix shared, “In our early days, when we had little revenue or profit, membership growth was a strong indicator of our future potential,” whereas, nowadays, that metric is, “just one component of our growth”.
The sentiment shared by the company’s investors is in keeping with the overarching manifesto Netflix seems to be operating by currently: make as much profit as possible. Recently, for instance, the production side of Netflix has been criticised for scrapping films like Aurora or Monkey Man due to their apparent lack of profitability. This prioritisation of profits may be earning the shareholders a nice pay packet, but it is damaging the artistic integrity of the production company.
A change in the ethos of Netflix was best exemplified by the crackdown on password sharing. After all, in previous years, the company has tweeted out things like “Love is sharing a password”. Therefore, a sudden change in heart led Netflix to put a stop to password sharing, which damaged the reputation of the company.
Nevertheless, the password-sharing crackdown is likely to thank for the increase in user numbers. Despite this, the company suggested that the increase in profits and users was largely as a result of their hit programming, such as the recent drama series Griselda.
Whether or not Netflix can keep this gravy train rolling for much longer remains to be seen, but for now the streaming giants can sit back and enjoy their record profits.
Love is sharing a password.
— Netflix (@netflix) March 10, 2017