On Tuesday, Netflix said that its subscriber base reached a record high of 232.5 million in the first three months of the year and that its newly launched ad-supported tier is doing well.
The leading streaming television provider announced a $1.3 billion quarterly profit, in line with estimates, but claimed to have postponed a sweeping crackdown on the sharing of account passwords “to improve the experience for members.”
Instead, Netflix stated that it plans to start introducing its alternatives for compensated password sharing this quarter.
According to a statement from Netflix to shareholders, some members and financial incentives associated with the transfer have been delayed.
“We believe this will result in a better outcome for both our members and our business,” Netflix said.
And while a new ad-subsidized subscription tier at Netflix is in its early days, engagement is above initial expectations and Netflix has seen “very little switching from our standard and premium plans.”
According to market watcher Insider Intelligence, Netflix will generate $770 million in ad income from the new tier this year, and that amount will surpass $1 billion the following year.
Last year, when Netflix’s growth slowed, the Silicon Valley-based streaming service concentrated on developing a more affordable subscription tier with advertising.
In addition, Netflix wanted to encourage users who were using shared passwords to watch content for free to start paying for the service without alienating current users.
According to Insider Intelligence, US consumers will watch more digital video this year than traditional television for the first time ever. These platforms include Netflix, TikTok, and YouTube.
The market tracker anticipates that for the first time ever, “linear TV” will make up less than half of daily viewing, falling to under three hours, while average daily digital video consumption increases to 52.3 percent with 3 hours and 11 minutes.
