Netflix's Password-sharing Crackdown Reels in Subscribers as It Raises Prices for its Premium Plan

Netflix on Wednesday disclosed summertime subscriber gains that surpassed industry analysts’ projections, signaling the video streaming service’s crackdown on password sharing is converting former freeloaders into paying customers.
In an effort to bring in even more revenue, Netflix also announced it's raising the price for its most expensive streaming service by $2 to $23 per month in the US — a 10% increase — and its lowest-priced, ad-free streaming plan to $12 — another $2 bump. The $15.50 per month price for Netflix's most popular streaming option in the US will remain unchanged, as will a $7 monthly plan that includes intermittent commercials, The Associated Press said.
It also raised its prices for subscribers in the UK and France.
The company added nearly 8.8 million worldwide subscribers during the July-September period, more than tripling the number gained during the same time last year when Netflix was scrambling to recover from a downturn in customers during the first half last year. The increase left Netflix with about 247 million worldwide subscribers, well above the 243.8 million projected by analysts surveyed by FactSet Research.
Netflix’s financial performance also topped the analyst forecasts that shape investor expectations. The Los Gatos, California, company earned $1.68 billion, or $3.73 per share, a 20% increase from the same time last year while revenue climbed 8% to $8.54 billion.
The company’s stock price soared more than 12% in extended trading after the latest quarterly numbers came out. Netflix shares have increased by about 30% so far this year amid mounting evidence its video streaming service is faring better than most in a crowded fielded of competitors that is testing the financial limits of many households.
Netflix has picked up more than 16 million subscribers through the first nine months of the year, already eclipsing the 8.9 million subscribers that it added all of last year. But it’s still a fraction of the more than 36 million additional subscribers that Netflix attracted in 2020 when the pandemic turned into a gold mine for the service at a time when people were looking for ways to stay entertained while tethered to home.
This year’s subscriber inroads have been made despite entertainment labor strife centered in part on writers’ and actors’ complaints about unfairly low payments doled out by video streaming services such as Netflix. The company has been able to withstand the recently settled writers’ strike and ongoing actors strike by drawing upon a backlog of already finished TV series and movies in the US, as well as productions made in international markets unaffected by the labor disputes.
In an apparent effort to rebuild its library of original programming after everyone returns to work, Netflix said it expects to spend about $17 billion on TV series and films next year.
Netflix’s decision to abandon its long-established practice of allowing subscribers to share their account passwords with friends and family outside their households has prompted more viewers who had been watching the video service for free to sign up for their own accounts. The crackdown also has boosted Netflix’s in another way – current subscribers can share their accounts with someone living outside their households by paying higher monthly fees.
“We are incredibly pleased with how it has been going,” Netflix co-CEO Greg Peters said when asked about the password-sharing crackdown during a Wednesday video conference call. He predicted more subscriber gains will accrue from the crackdown for at least several more quarters as Netflix confronts more “borrower households” about watching the service's programming without paying for it.
The apparent success of the password-sharing crackdown could now free management to focus on other ways to bring in more revenue, such as a low-priced option that includes advertising introduced a year ago.
Netflix’s decision to open its service up to commercials hasn’t been a big boon yet. But Harding Loevner analyst Uday Cheruvu said he believes that will change as advertisers realize that the personal information the company has gleaned from viewers’ entertainment tastes can help target their commercials at consumers most likely to buy their products in the same way internet powerhouses such as Google and Facebook have been doing for years. Peters said during the video conference call that Netflix is already working with is ad partner, Microsoft, to target its commercials more precisely.
“I think the advertising potential of Netflix is underappreciated,” Cheruvu said. “The audience engagement with the video advertising there could be multiple times stronger than a social media platform.”
In a shareholder letter, Netflix said roughly 30% of its incoming subscribers are opting for the $7 plan with commercials, growth that is likely to attract more spending from advertisers. The higher prices for Netflix's premium plans also seems likely to divert more subscribers into the ad-supported option.
“The ‘streamflation’ era is upon us, and consumers should expect to be hit with price hikes, password sharing limits, and enticed with ad supported options,” said Scott Purdy, US media leader for KPMG.

Kendrick Lamar gave music listeners an early holiday present Friday with the surprise drop of a new album.

The Grammy winner's 12-track “GNX” is his first release since 2022's “Mr. Morale & The Big Steppers” and his sixth studio album overall. It also comes just months after his rap battle with Drake.

Lamar first teased the album with a cover art and video snippet of “GNX,” which features multi-instrumentalist Jack Antonoff as a co-producer on every track except for “Peekaboo.” Other notable producers include Sounwave and DJ Mustard, who both contributed production on the hit “Not Like Us,” the ubiquitous diss track emanating from the Drake feud.

Lamar's former Top Dawg Entertainment labelmate SZA appears on a couple songs including “Gloria” and “Luther,” which also features sampled vocals from Luther Vandross and Cheryl Lynn through “If This World Were Mine."
On the opening track “Wacced Out Murals,” Lamar raps about cruising in his Buick GNX (Grand National Experimental) car with listening to Anita Baker. He brings up Snoop Dogg posting Drake's AI-assisted “Taylor Made Freestyle” diss track on social media and Nas congratulating Lamar for being selected to headline February's Apple Music Super Bowl Halftime Show in New Orleans.
Lamar also shows admiration for Lil Wayne, who expressed his hurt feelings after being passed over as the headliner in his hometown.
Lamar, 37, has experienced massive success since his debut album “good kid, m.A.A.d city” in 2012. Since then, he’s accumulated 17 Grammy wins and became the first non-classical, non-jazz musician to win a Pulitzer Prize for his 2017 album “DAMN.”
The surprise release caps a big year for Lamar, who was featured on the song “Like That” with Future and Metro Boomin — a track that spent three weeks at No. 1 on the Billboard Hot 100 this year.
Lamar is up for seven Grammys, fueled by “Not Like Us,” which earned nods for record and song of the year, rap song, music video as well as best rap performance. He has two simultaneous entries in the latter category, a career first: “Like That” is up for best rap performance and best rap song, too.

Netflix's Password-sharing Crackdown Reels in Subscribers as It Raises Prices for its Premium Plan