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

FILE PHOTO: Smartphone with Netflix logo is placed on a keyboard in this illustration taken April 19, 2022. REUTERS/Dado Ruvic/File Photo
FILE PHOTO: Smartphone with Netflix logo is placed on a keyboard in this illustration taken April 19, 2022. REUTERS/Dado Ruvic/File Photo
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Netflix's Password-sharing Crackdown Reels in Subscribers as It Raises Prices for its Premium Plan

FILE PHOTO: Smartphone with Netflix logo is placed on a keyboard in this illustration taken April 19, 2022. REUTERS/Dado Ruvic/File Photo
FILE PHOTO: Smartphone with Netflix logo is placed on a keyboard in this illustration taken April 19, 2022. REUTERS/Dado Ruvic/File Photo

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.

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JoJo Was a Teen Sensation. At 33, She’s Found Her Voice Again

Singer Joanna Levesque, who rose to fame as “JoJo” when she was 13, poses for a portrait to promote her memoir, “Over the Influence,” on Wednesday, Sept. 18, 2024, in New York. (Invision/AP)
Singer Joanna Levesque, who rose to fame as “JoJo” when she was 13, poses for a portrait to promote her memoir, “Over the Influence,” on Wednesday, Sept. 18, 2024, in New York. (Invision/AP)
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JoJo Was a Teen Sensation. At 33, She’s Found Her Voice Again

Singer Joanna Levesque, who rose to fame as “JoJo” when she was 13, poses for a portrait to promote her memoir, “Over the Influence,” on Wednesday, Sept. 18, 2024, in New York. (Invision/AP)
Singer Joanna Levesque, who rose to fame as “JoJo” when she was 13, poses for a portrait to promote her memoir, “Over the Influence,” on Wednesday, Sept. 18, 2024, in New York. (Invision/AP)

Joanna Levesque shot to stardom at 13. Two decades later, “JoJo” — as she’s better known — has written a memoir and says the song responsible for her meteoric rise, “Leave (Get Out),” was foreign to her. In fact, she cried when her label told her they wanted to make it her first single.

Lyrics about a boy who treated her poorly were not relatable to the sixth grader who recorded the hit. And sonically, the pop sound was far away from the young prodigy's R&B and hip-hop comfort zone.

“I think that’s where the initial seed of confusion was planted within me, where I was like, 'Oh, you should trust other people over yourself because ... look at this. You trusted other people and look how big it paid off,’” she said in a recent interview with The Associated Press.

“Leave (Get Out)” went on to top the Billboard charts, making Levesque the youngest solo artist ever to have a No. 1 hit.

“I grew to love it. But initially, I just didn’t get it,” she said.

Much of Levesque’s experience with young pop stardom was similarly unpredictable or tumultuous, and she details those feelings in her new memoir, “Over the Influence.”

With “Leave (Get Out)” and her several other commercial hits like “Too Little Too Late” and “Baby It’s You,” Levesque’s formative years were spent in recording studios and tour buses. Still, she had a strong resonance with teens and young people, and her raw talent grabbed the attention of music fans of all ages.

“Sometimes, I don’t know what to say when people are like, ‘I grew up with you’ and I’m like, ‘We grew up together’ because I still am just a baby lady. But I feel really grateful to have this longevity and to still be here after all the crazy stuff that was going on,” she said.

Some of that “crazy stuff” Levesque is referring to is a years-long legal battle with her former record label. Blackground Records, which signed her as a 12-year-old, stalled the release of her third album and slowed down the trajectory of her blazing career.

Levesque said she knows, despite the hurdles and roadblocks the label and its executives put in her path, they shaped “what JoJo is."

“Even though there were things that were chaotic and frustrating and scary and not at all what I would have wanted to go through, I take the good and the bad,” she said.

Levesque felt like the executives and team she worked with at the label were family, describing them as her “father figures and my uncles and my brothers." “I love them, now, still, even though it didn’t work out,” she said.

With new music on the way, Levesque said she thinks the industry is headed in a direction that grants artists more freedom over their work and more of a voice in discussions about the direction of their careers. In 2018, she re-recorded her first two albums, which were not made available on streaming, to regain control of the rights. Three years later, Taylor Swift started doing the same.

“Things are changing and it’s crumbling — the old way of doing things,” she said. “I think it’s great. The structure of major labels still offers a lot, but at what cost?”

As she looks forward to the next chapter of her already veteran-level career, Levesque said it’s “refreshing” for her to see a new generation of young women in music who are defying the standards she felt she had to follow when she was coming up.

“'You have to be nice. You have to be acceptable in these ways. You have to play these politics of politeness.’ It’s just exhausting,” she said, “So many of us that grew up with that woven into the fabric of our beliefs burn out and crash and burn.”

It’s “healing” to see artists like Chappell Roan and Billie Eilish play by their own rules, she said.

In writing her memoir and tracing her life from the earliest childhood memories to today, Levesque said she’s “reclaiming ownership” over her life.

“My hope is that other people will read this, in my gross transparency sometimes in this book, and hopefully be inspired to carve their own path, whatever that looks like for them.”