Netflix’s Password-Sharing Crackdown Is Working—for Now

If it’s not the company motto yet, it should be: Never count Netflix out. On Wednesday, the streaming giant beat Wall Street projections by reporting a gain of nearly 9 million new subscribers worldwide and $8.5 billion in revenue for the third quarter of 2023, a nearly 8 percent increase year-over-year. While that might all sound like a bunch of finance bro brouhaha, it’s also remarkable considering the very tumultuous three years the company—and Hollywood—has had.

Consider the company’s crackdown on password sharing. The long-planned killjoy campaign rolled out in the US and UK in May 2023. It came on the heels of a topsy-turvy time for streaming, when Netflix was facing increased competition from new streamers like Disney+ and HBO Max (now known as Max) and losing subscribers for the first time in a decade. The move to quash password-sharing—which basically shut out users who didn’t appear to live in the same household as the account holder—also landed shortly after the streamer pushed its much-hyped $7-per-month ad-supported tier.

For months it looked as though Netflix’s shifts in plans, pricing, and password enforcement were the moves of a company feeling the squeeze of additional competition and a loss of cool in the realm of public perception. As recently as this week, analysts were cutting the company’s stock price forecasts amid talk that users weren’t flocking to the new ad-supported tier. And yet, in a letter to investors Wednesday announcing the company’s quarterly earnings, Netflix noted that membership in its ad-supported plans is up nearly 70 percent quarter-over-quarter. The streaming giant also noted it has brought “paid sharing”—which allows users to share accounts for an additional fee—to every region where Netflix is available.