Netflix Continues to Gain Subscribers After Password-Sharing Crackdown

Netflix has reportedly continued to gain subscribers in the United States after beginning its crackdown on password sharing and introducing new subscription plans.

The streaming giant saw a growth in subscribers numbers in July, with 2.6 million gross additions in the U.S., subscription economy data provider Antenna said in a Wednesday (Aug. 23) insight.

Although this represents a dip of 25.7% from the record-breaking numbers in June, when sign-ups surged immediately after the crackdown began in late May, it still showcases Netflix’s ability to attract new customers, according to the post. Netflix led the category for the second consecutive month, accounting for nearly one in five premium subscription video on demand (SVOD) gross adds.

Another trend observed in July was the increase in sign-ups for Netflix’s ad-supported plan, the post said. Approximately 23% of new Netflix subscribers opted for this plan, marking an increase of four percentage points compared to June. This surge represents the highest portion of sign-ups for the ad-supported plan since its launch in November.

“And with Netflix no longer offering the Basic ad-free plan to new and returning subscribers in the U.S., we’ll be interested to see how this impacts the composition of Netflix subscriptions and sign-ups overall in the coming months,” Antenna said in the post.

Netflix dropped its $9.99 Basic plan — its cheapest monthly plan that doesn’t include ads — in July, though existing subscribers can stay on this plan as long as it isn’t changed or cancelled.

Shortly after introducing its first ad-supported plan, the streaming giant reported that the engagement of users of that plan is similar to that of the ad-free plans.

“That’s really a promising indication that means we’re delivering a solid experience, and it’s better than we modeled,” Netflix’s then-Chief Operating Officer Greg Peters said during the company’s quarterly earnings call in January. “That’s a great sort of fundamental starting point for us to work with.” Peters is now the co-CEO of Netflix.

The company’s long-threatened crackdown on password sharing began in May when Netflix began sending an email to members who share the service outside their household, reminding them that an account is for use by only one household.