Netflix’s latest earning report revealed that the company added 13 million subscribers during the last quarter of 2023, more growth than any quarter since 2020.
“2023 was a pretty unusual year for us. It was essentially all member driven growth because our pricing and plans focus in 2023 was on rolling out paid sharing,” said Spencer Neumann, the Chief Financial Officer of Netflix during the earnings interview which was posted to YouTube on Tuesday.
Using paid sharing, customers pay a discounted rate to add other members to their Netflix subscriptions who do not live with them. While Netflix used to allow subscribers to do this for free, it began implementing paid sharing for U.S. subscribers in mid-2023, after noticing a decline in subscribers in the first six months of 2022.
When the switch was announced, it angered many subscribers. “Cancel Netflix. They just lost my business. ‘Password-sharing’ is not a thing, it's called password-using. This is regressive bulls*** borne out of capitalist greed to squeeze more money out of us. People paid for a password and they use it wherever they go,” one person wrote in a viral Tweet on X in February 2023. It currently boasts over 3 million views and 89,000 likes.
Nevertheless, despite the initial anger, it appears that many customers were willing to pay for the service. Netflix also saw steady growth in other aspects of the business, including a subscription that includes advertisem*nts for $6.99 a month, as opposed to the non-advertisem*nt plan of $15.49 a month.
“Our top ads priority… is scale,” said Greg Peters, the Managing Director of Netflix, during the earning interview on YouTube. “We saw a 70% quarter on quarter growth last quarter—that’s after 70 on 70 growth for the quarter before… so that’s a good trajectory to be on.”
