What happened?

Netflix has recently taken stricter measures in the US and other countries around the world to limit password sharing. The streaming giant now requires each account to be owned by a single household, meaning people living outside of the account holder’s place of residence must either purchase their own subscription or pay extra for use.

These events attracted great attention in social networks where the hashtag was used. #CancelNetflix became a rallying cry for disgruntled subscribers. However, although the backlash may lead to some cancellations, Netflix remains optimistic about its revenue growth prospects.

It is important to note that the increase in cancellations cannot be attributed solely to password sharing policies, as other factors such as the quality of original content and cancellations of popular TV series also contribute to subscriber dissatisfaction.

Netflix’s revenue prospects and long-term strategy

Netflix probably expected some backlash after implementing a stricter password sharing policy. The company presumably assumed that any loss of business resulting from the cancellation would be compensated by people who choose to pay for their own accounts or those willing to fund subscriptions for others. However, some longtime and loyal Netflix subscribers seem to be saying goodbye to the streaming platform.

Despite potential cancellations, Netflix maintains a positive outlook for revenue growth. Earlier this year, the company acknowledged the possibility of short-term cancellations in each market, but expressed confidence that revenues will grow over time.

Netflix hopes to increase overall revenue by encouraging individual households to activate their own accounts and allowing additional accounts to be created. However, effectively managing the creation of additional accounts can be challenging for a company. Ultimately, Netflix’s ability to retain ex-users who share their passwords will depend on its ability to create engaging content.

Results and current subscriber statistics

As of the first quarter of this year, Netflix can boast of incredible features. 232.5 million subscribers about 74.4 million of them are in the United States alone. The company generated $3 billion in revenue in the first quarter of 2023 alone and remains a dominant force in the streaming industry.

But the company now faces the delicate task of striking a balance between tightening controls on password sharing and continuing to produce compelling content that justifies the cost of individual subscriptions.