NIXsolutions: Netflix Cracking Down on Unauthorized Account Sharing

During the second quarter, Netflix, the streaming services giant, witnessed a significant surge in its client base, adding 5.9 million users. The key factor contributing to this success was Netflix’s active fight against unauthorized account sharing, which initially launched in the US, Canada, and other countries. Recently, the company extended the ban on account sharing to all customers globally.


Tightening Policies and Growth in Subscribers

In May, Netflix implemented a policy aimed at preventing multiple users from sharing the same account, except for those within the same household. Consequently, the subscriber base began to grow as the company tightened its policies, according to analytics firm Antenna.

CEO Greg Peters emphasized that the impact of these measures would be seen over time, as some users who share accounts may eventually register for their own. This process could take several months, especially when Netflix introduces highly anticipated content for sale.

Revenue and Forecasts

Despite facing some fluctuations, Netflix reported revenue of $8.19 billion in the second quarter, marking a 3% year-over-year increase. The company’s net income also rose by $50 million compared to the previous year, reaching $1.49 billion. However, following the main trading session, Netflix shares on the stock exchange experienced an 8% decline.

Looking ahead, Netflix anticipates revenue growth of 7% year-over-year in the third quarter, amounting to $8.5 billion, attributed to a rise in average paid subscriptions.

Future Growth and Positive Revenue Dynamics

Netflix predicts that subscriber growth in the third quarter will mirror that of the second quarter, notes NIXsolutions. Additionally, the company expects significant acceleration in fourth-quarter revenue growth due to the increasing momentum of its anti-password efforts. The growth in advertising revenue will also contribute to maintaining a positive revenue trend.