Netflix’s decision to push users who share passwords to create their own accounts has paid off, with the company adding more than 9 million subscribers in the first three months of the year, reaching a record high of 269.6 million subscribers. This move has helped convert freeloader viewers into paid users, indicating that password sharing was more common than previously thought. While the subscriber additions exceeded Wall Street’s estimates, Netflix reported a drop in growth from its previous quarter. The company also announced plans to stop sharing its quarterly subscriber numbers in 2025.
Despite the drop in growth, Netflix reported $9.37 billion in revenue and earnings per share of $5.28 for the first quarter, beating Wall Street’s estimates. However, the stock fell in after-hours trading. Netflix has been known for its old business model, but in recent months, the company has made moves to expand and reinvent its business to increase profit. This includes big bets in live sports, video games, and licensing content, as well as transitioning to an ad-supported model.
While Netflix led in nominations at the Oscars, it only took home one award, leading the company to potentially move away from developing big-budget films and TV shows that could win awards. The company’s first-quarter letter to shareholders outlined goals to sustain long-term growth, including improving the variety and quality of entertainment. Netflix plans to license more content from other studios, as well as offer iconic shows from past decades, which have attracted viewers.
Netflix has also ventured into live and sports programming, such as airing the Screen Actors’ Guild Awards and signing a 10-year deal to air “WWE Raw” live. Partnering with Rockstar Games’ “Grand Theft Auto” franchise has allowed Netflix to further expand into the video game space. The company’s newer advertising-supported subscription tier, which costs less than traditional plans, has seen explosive growth and could be a key factor in Netflix’s future growth.
With the company’s decision to stop sharing quarterly paid subscriber numbers in 2025, Netflix is focusing on evolving its revenue model and expanding into advertising and other revenue streams. Analysts believe that this move allows Netflix to emphasize its strengths and position itself as a leader in subscribers. However, some analysts caution that the boost from password sharing may diminish over time, making it challenging for Netflix to continue adding subscribers at the same rate as in previous quarters.
