Netflix again proved that eliminating shared accounts was a wise move. According to the streaming platform, during its last quarter (which ended on June 30), 5.89 million new users were registered. This figure confirms that, despite the elimination of shared accounts, the company's gamble paid off. This was reported by Netflix CFO Spencer Neuman in statements picked up by CNN:
Most of our revenue growth this year is from growth in volume from new paid memberships and that’s largely driven by our paid sharing rollout.
The almost 6 million new users also exceeded the expectations that many analysts, as well as the platform itself, had made. They claimed that only approximately 1.7 million new subscribers would be registered. However, the figure tripled the initial estimates and brought the number of worldwide Netflix users to more than 238 million. "Sign-ups are already exceeding cancellations," Neuman said.
Goodbye to Netflix's ad-free basic plan
The new users, however, are not enough to reach the estimates that Wall Street predicted Netflix would reach this quarter. As revealed by the company, it managed to earn almost $8.19 billion in this period. This figure is slightly lower than the $8.3 billion projected by Wall Street.
It also recorded net earnings of $1.49 billion, 3% more than in the same period of the previous year. This figure still makes them cautious, as the company assured in a letter to its investors accessed by CNN: "While we’ve made steady progress this year, we have more work to do to reaccelerate our growth."
To this end, one of the first actions the streaming platform will take will be to get rid of its basic plan without advertising. This action has already been implemented in the United States and the United Kingdom, where the basic plan without advertising, which previously cost $9.99 in the United States and 6.99 pounds in the United Kingdom, is no longer available. With this decision, only the $6.99 plan in the US and the £4.99 plan in the UK will be available. This is more than enough plans for the public, as a Netflix spokesperson assured to Variety:
Our starting prices of $6.99 in the U.S. and £4.99 in the U.K. [for Standard With Ads] are lower than the competition and provide great value to consumers given the breadth and quality of our catalog.