Netflix has experienced a significant surge in new sign-ups at the end of last year as customers, prompted by the streaming giant’s crackdown on password-sharing, opted to create their individual accounts.
The company reported an addition of over 13.1 million subscriptions in the final quarter of 2023, marking the highest quarterly growth since 2020 and extending a positive streak initiated the previous year.
Netflix expressed confidence in its growth trajectory and announced plans to raise prices.
Co-chief executive Greg Peters mentioned in a call with analysts that they had temporarily paused price increases during the rollout of measures to curb password-sharing, and now, with that phase completed, they are set to resume their standard approach.
Peters summarized the situation as a return to “business as usual.”
Interestingly, many of the new subscribers opted for Netflix’s cheapest plan, demonstrating a willingness to embrace limited features and, notably, advertising.
In the 12 countries where Netflix offers ad-supported plans, including major markets like the UK and the US, this lower-cost option accounted for a substantial 40 percent of new sign-ups.
This development marks an ironic twist for Netflix, which staunchly resisted incorporating advertisements for years, citing concerns about impacting the viewer experience and complicating business operations with privacy risks and other issues.
However, faced with an unexpected decline in subscribers and a subsequent dip in profits in the first half of 2022, the company shifted its strategy to explore new avenues for attracting viewers and increasing revenue.
The recent surge in subscriptions, coupled with the willingness of new members to embrace ad-supported plans, reflects Netflix’s adaptability in responding to market dynamics.