Streaming giant Netflix has reported an increase of 1.75 million subscribers in the first quarter of 2023, which is attributed to the introduction of an ad-supported layer and the recent implementation of measures to curb password sharing.
A competitive sector
Netflix has long been the leader in the streaming market, but has faced stiff competition from the likes of Walt Disney, Amazon, and Warner Bros. Discovery. In 2022, Amazon dethroned Netflix as the most popular streaming service in the United States, according to consulting firm Parks Associates.
The arrival of new competitors in the market, together with the saturation of the streaming market, has caused the growth of the industry to slow down. Netflix, as the market leader, is a good indicator of this trend and its future growth is expected to be affected.
What’s new in the ad-supported version
Netflix has long been known for not showing ads on its platform, but in November 2022, the company announced an ad-supported streaming option for $6.99 a month in 12 countries. Although this move surprised many, other streaming services like Hulu, Disney+, and HBO Max had already adopted this strategy before.
The ad-supported streaming option is one way Netflix is ​​looking to increase its revenue and stay competitive in the market, while offering a cheaper alternative to its users. However, some fans of the platform have criticized this decision, arguing that advertising could negatively affect the user experience.
Netflix has announced that subscribers to its ad-supported plan will receive a free video quality upgrade. Since its launch in November 2022, Netflix’s “Basic with Ads” plan has allowed users to access most content on the platform with the exception of occasional ads while viewing. However, subscribers to this plan have been limited to 720p video quality, which has generated criticism from users.
In its Q1 2023 report, Netflix has announced that it has listened to its users and is increasing the video quality of its “Basic with Ads” plan to 1080p at no additional cost to subscribers. In addition, the company has also increased the number of simultaneous streams from one to two, which means that two people can watch different content on the platform at the same time.
Netflix has revealed that subscribers in Canada and Spain You can already enjoy the upgrade to 1080p and additional simulcast, and that this upgrade will be available in all markets by the end of this month. This move by Netflix is ​​a welcome change, as limiting users to 720p video quality in 2023 is just ridiculous.
Measures to stop password sharing
Another factor that has contributed to the increase in subscribers in the first quarter of 2023 has been the implementation of measures to curb password sharing. In the past, Netflix has been criticized for not taking stronger measures to combat this common practice, which has negatively affected its revenue.
The introduction of measures to curb the sharing of passwords has been welcomed by investors, who hope that this initiative will help increase the company’s revenues. However, some users of the platform have also expressed their dissatisfaction with this decision, arguing that sharing passwords is a common practice among friends and family.
