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Netflix’s calculations against password sharing outside of a household have worked so far. The video streaming giant added 5.9 million subscribers in the second quarter.

Netflix hasn’t said how many of them were formerly account-free riders who now have their own accounts. But there are more subscription customers and sales in every region than before, co-boss Greg Peters stressed. “We see that it works.”

Since the beginning of the summer, Netflix has been taking action against users who share an account across a household. Additional money is now due for this – either the co-users pay for their own account, or the previous account owner adds them as an additional member for an additional fee.

238 million customers on Netflix

According to previous calculations by Netflix, about 100 million used the password from another household. The company is betting that affected users would rather pay than cancel the service. Netflix now had a total of 238.4 million paying customers at the end of the quarter. For the current quarter, Netflix expects a similar increase in the number of users. It may take several quarters for some affected users to win them over as customers, Peters admitted Thursday evening.

Compared to the same quarter last year, revenue increased 2.7 percent to nearly $8.2 billion. The bottom line was a profit of $1.49 billion after being in the black of $1.44 billion a year earlier. Investors were not impressed by the quarterly figures and the forecast: the share fell by no less than eight percent in aftermarket trading. Previously, the price had already risen by more than 60 percent since the beginning of the year.

Strike threatens streaming portals

Due to the strike of screenwriters and actors in Hollywood, Netflix will initially spend more free money in the current quarter. The same goes for other streaming services and TV stations in America. But the strike also means a gap in the supply of films and TV series. If the strike continues into September, “it’s going to be a real problem,” industry analyst Michael Nathanson told CNBC.

The industry is preparing for it. For example, Paramount wants to fill the gaps in the program of its broadcaster CBS with episodes of the series “Yellowstone”, which is actually a driving force for Netflix’s house competitor Paramount +. Netflix, with a large library of movies and series and production studios scattered around the world, is in a better position than some of its rivals.

Fierce competition

There is fierce competition for users in the video streaming industry, especially after more and more players entered the market with their own services: studios like Disney, Warner and Paramount, tech giants like Amazon and Apple. Netflix is ​​one of the providers that wants to attract less eager users with a cheaper offer through advertising.

And this approach seems to be working. At Netflix, the rate’s users have almost doubled in three months — albeit from a lower tier, the company said. Thanks to advertising revenue, Netflix already realizes more sales per user in the ad subscription than in the ad-free basic version. In the US, the revenue per user in the advertising model, which costs $6.99 there, surpassed even the standard subscription of $15.49.

Netflix wants to become more attractive to advertisers

At the Disney+ streaming service, 40 percent of new customers recently opted for the cheaper version with advertising, CEO Robert Iger recently said. Netflix now wants to become as attractive as possible to advertisers. If you wish, you can, among other things, only reserve advertising space in the ten most popular films and series – a wide audience is guaranteed.

An exciting question in the industry right now is whether ad spend will move faster from classic TV to ad-supported streaming. Disney boss Iger has recently been so skeptical about the future of linear television that he has not ruled out getting rid of the group’s own TV channels, such as ABC, in the long term.

(yam/sda/dpa)