• by Karlene Lukovitz  @KLmarketdaily, August 24, 2023

How is Netflix faring in the wake of its password-sharing crackdown?

Antenna reported spikes in daily gross U.S. sign-ups in the first few days after Netflix rolled out the policy in late May.

Now, Antenna is reporting that the world’s largest streaming service added 2.6 million gross U.S. subscriptions in July, and saw accelerated growth of sign-ups for its new ad-supported (AVOD) tier.

The U.S. gross adds include sign-ups for the AVOD tier ($6.99 per month) and two no-ads plans (standard at $15.49 per month and premium at $19.99).

They reflect continuing momentum driven by the crackdown that’s forced those who’d been sharing accounts to pay additional fees or start new accounts. 

However, while elevated compared to Netflix’s pre-crackdown average monthly gross U.S. adds of roughly 1.5 million, July’s adds were down 25.7% compared to its record-breaking addition of nearly 3.5 million gross U.S. subscriptions in June (chart above).

Also, Antenna did not report estimates of subscriber losses or churn, which means it’s not possible to gauge Netflix’s actual net U.S. subscriber growth in July.

Meanwhile, the share of new sign-ups coming from the Standard with Ads tier rose to 23% in July — up four points compared to June’s 19% and three points from May’s 20%.

To at least a small extent, the July U.S. numbers must also reflect some activity driven by Netflix’s discontinuation of its $9.99 “basic” ad-free plan in the U.S. and UK for new and returning subscribers as of mid July — although, as Antenna notes, it’s too early to get a sense of how this will impact the composition of Netflix subs and sign-ups as a whole over time.

After losing nearly a million net global subscribers in second-quarter 2022, Netflix rebounded in this year’s Q2, reporting a gain of 5.9 million in the period (to 238.3 million total), which reflected about a month’s worth of post-password-crackdown activity.

In reporting that quarter’s earnings, Netflix executives reported satisfaction with the results of the account-sharing crackdown, and said that the service’s churn or cancel rates (which have in the past been reported at a very low 2%-plus) had increased, but not as much as sign-ups.

While saying that it’s too early to provide revenue specifics on the new, ad-supported plan, they said the number of subscribers, while small, had doubled since the first quarter, adding that they know that the tier is “working” are are confident that advertising will become a multi-billion-dollar, incremental revenue stream over time.

Antenna’s subscriber numbers are based on online purchase receipts, credit, debit and banking data and bill-scrape data and then factors in demographic and behavioral factors. Free-trial subs are excluded.