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| Netflix: Profits soar after password sharing crackdown | |
| (about 1 hour later) | |
| Sofía Vergara played Griselda Blanco in the six-part Netflix series | Sofía Vergara played Griselda Blanco in the six-part Netflix series |
| Netflix says its profits have soared in the first three months of this year, partly thanks to a crackdown on password sharing. | |
| The streaming giant said it added 9.3 million customers in the first quarter, bringing its total number of subscribers to almost 270 million. | |
| The company also said its profits in the first quarter jumped to more than $2.3bn (£1.85bn). | |
| But the firm will stop reporting key subscriber numbers from next year. | |
| Announcing the decision, the firm said in a letter to shareholders: "In our early days, when we had little revenue or profit, membership growth was a strong indicator of our future potential". | |
| It added that today, subscriber numbers have become "just one component of our growth", asking investors to focus on its profits and revenue. | |
| Its revenue for the first quarter rose by nearly 15% year-on-year to $9.37m. | |
| The firm also credited a "drumbeat" of hits, such as crime drama Griselda. | The firm also credited a "drumbeat" of hits, such as crime drama Griselda. |
| Some investors saw its unexpected decision to stop reporting subscriber numbers as a sign that Netflix's wave of customer growth may be coming to an end. | |
| Jamie Lumley of research firm Third Bridge wrote that the decision raises "questions about the growth prospects of Netflix's subscriber base". | Jamie Lumley of research firm Third Bridge wrote that the decision raises "questions about the growth prospects of Netflix's subscriber base". |
| Other technology giants such as Facebook parent Meta and social media platform X, formerly Twitter, also stopped reporting monthly active user numbers as growth slowed. | |
| Netflix shares were almost 5% lower after the announcement. | Netflix shares were almost 5% lower after the announcement. |
| "Streaming is a notoriously choppy market, and keeping hold of customer dollars is an uphill climb," said Sophie Lund-Yates, lead equity analyst at share dealing platform Hargreaves Lansdown. | "Streaming is a notoriously choppy market, and keeping hold of customer dollars is an uphill climb," said Sophie Lund-Yates, lead equity analyst at share dealing platform Hargreaves Lansdown. |
| "One area Netflix has an edge is its original content slate, which is known to be an excellent retention tool when compared to repurposed shows and films." | "One area Netflix has an edge is its original content slate, which is known to be an excellent retention tool when compared to repurposed shows and films." |
| Netflix last raised the price of its popular "standard" plan in 2022. | |
| The move was followed by an unusual drop in subscribers that startled investors and intensified concerns that Netflix was losing dominance over the industry it had pioneered. | The move was followed by an unusual drop in subscribers that startled investors and intensified concerns that Netflix was losing dominance over the industry it had pioneered. |
| Soon after, the company said it would reignite growth by cracking down on password sharing and launch a new plan that was less expensive but showed adverts. | Soon after, the company said it would reignite growth by cracking down on password sharing and launch a new plan that was less expensive but showed adverts. |
| The firm is also pushing into areas such as sports and video games, while continuing to license material from rival media firms looking for ways to boost profits. | The firm is also pushing into areas such as sports and video games, while continuing to license material from rival media firms looking for ways to boost profits. |
| Analysts said the company also benefited from its global footprint, which helped it maintain a relatively strong pipeline of new shows, despite strikes that rocked Hollywood last year. | Analysts said the company also benefited from its global footprint, which helped it maintain a relatively strong pipeline of new shows, despite strikes that rocked Hollywood last year. |
| Netflix shares have risen by more than 30% since the start of this year, close to their 2021 peak. | Netflix shares have risen by more than 30% since the start of this year, close to their 2021 peak. |
| Related Topics | Related Topics |
| Companies | Companies |
| International Business | International Business |
| Streaming | Streaming |
| Netflix | Netflix |