Netflix topped earnings expectations, reporting Thursday that profit and subscriber ranks grew as its heavy bet on a rich content line-up paid off amid a crackdown on password sharing.
The leading streaming television service said it gained 9.3 million subscribers in the recently ended quarter, raising the total to 269.6 million.
“Netflix continues to lay the smackdown on its competition,” said Ross Benes, Emarketer senior analyst.
“This signals that password sharing was even more common than previously thought as Netflix keeps converting freeloader viewers into paid users.”
Netflix reported a profit of $2.3 billion on revenue of nearly $9.4 billion in the quarter, compared to a net income of $1.3 billion on $8.2 billion in revenue in the same period a year earlier.
Netflix shares have climbed since the start of this year, but investors seemed wary of the company’s ability to keep pumping up revenue and develop its nascent ad-supported tier into a meaningful money-maker.
The company launched an ad-subsidized offering last year around the same time as the crackdown on sharing passwords outside of homes.
Netflix is still in the early days of building its ad business, and it remains a work in progress, according to co-chief executive Greg Peters.
‘3 Body Problem’
Netflix unveiled a sprawling TV and film lineup for 2024 as it bet that must-see content would keep viewers paying for the streaming service.
In March, Netflix released keenly-anticipated “3 Body Problem.”
The series was adapted from a best-selling Chinese trilogy of novels which take place in an alternate version of modern reality where humanity has made contact with an alien civilization.
Other shows due later this year include the eagerly awaited second season of “Squid Game” — the dystopian Korean horror tale about a fictional, deadly game show which remains by far the most-watched Netflix TV series ever.
Also among a notably international lineup were a Spanish-language, Colombian-made TV series based on Gabriel Garcia Marquez’s beloved novel “One Hundred Years of Solitude” and a six-part drama about the life of Brazilian racing great Ayrton Senna.
Britain’s Prince Harry and his actress wife Meghan Markle are working on two nonfiction series with Netflix — a lifestyle program and a show on professional polo, their production company announced earlier this month.
The couple, who split with the British monarchy in 2020 and now lives in California, signed a deal with the streaming giant that same year for multiple projects.
On the movie side, Eddie Murphy returns this summer in a new “Beverly Hills Cop” sequel.
“As Netflix becomes more entrenched as an entertainment industry juggernaut, it will seek to avoid adopting the complacency of the companies it has displaced,” Benes said.
Netflix co-chief executive Ted Sarados said on an earnings webcast that the company “has no appetite for making fewer films” but is determined to make better films.
Sarandos said TikTok and YouTube short-form videos, while competing for viewing time in the big picture, have also revved up “fandom” with people sharing show snippets, memes and commentary.
Those platforms have also helped Netflix spot talented storytellers that the streaming television service is keeping its eyes on, according to Sarandos.
