Netflix also announced that it is winding down its DVD rental business, the service it started around 25 years ago. The streaming service said the DVD business had been shrinking and it will not be able to continue to offer quality service. The company will ship the last discs on September 29.
The streaming giant added 1.75 million subscribers in Q1 compared with 7.7 million in Q4 of 2022. Further, it had 231 million global paid memberships that generated $32 billion of revenue and $5.6 billion in operating income in Q4.
The streaming ain’t said it had delayed a broad crackdown on sharing of account passwords “to improve the experience for members.” Netflix said it expects to begin rolling out its options for paid password sharing this quarter instead.
The company said that its number of subscribers hit a record high 232.5 million in the first quarter of the year and that its nascent ad-supported tier is faring well.
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Restructuring on the anvil
Netflix serves as a bellwether for the streaming industry, in which growth has slowed as competition has intensified. Last month, a Bloomberg report said that Netflix will restructure its film groupwhich will result in layoffs and the departure of two of its most experienced executives.
As part of the restructuring, Netflix will combine small and midsize picture productions units, resulting in a few job cuts, and scale back the company’s output to ensure high-quality titles, the report said. It will also centralise the decision-making of different divisions.
In 2022, Netflix cut hundreds of jobs in two roundsfiring 150 people in April, followed by a 4% cut to its workforce, firing 300 people.
Lisa Nishimura, responsible for documentaries and smaller-budget films, and Ian Bricke, a vice president in the film group, will be leaving after more than a decade with the company, the report added.
Earlier in January, Netflix founder and co-CEO Reed Hastings announced he would step down after more than two decades at the company to become executive chairman. The news came shortly before Netflix reported its fourth-quarter earnings.
Password-sharing plans
After having lost 200,000 subscribers in the year-ago quarter amid stiff competition from rivals, Netflix was forced to look more seriously into password sharing and launching an ad-supported plan. The company returned to subscriber growth in the second half of 2022 but its pace of additions has slowed dramatically
In February this year, Netflix, which estimated that 100 million around the world use a shared account but do not pay for it, said members can now easily manage who has access to their account, transfer their profile to a new account, and still easily watch Netflix on their personal devices or log into a new TV.
“So over the last year, we’ve been exploring different approaches to address this issue in Latin Americaand we’re now ready to roll them out more broadly in the coming months, starting today in Canada, New Zealand, Portugal, and Spain,” the company said in a blog post.
Members on Netflix’s standard or premium plan in many countries can add an extra member sub-account for up to two people for an extra C$7.99 a month per person in Canada, NZD$7.99 in New Zealand, 3.99 euros in Portugal, and 5.99 euros in Spain, the company said.
Further, Netflix in November introduced a streaming plan with advertising for $6.99 per month in 12 countries, after resisting commercials for years. Disney’s Hulu and Disney+, and HBO Max already have ad-supported options.
(With inputs from agencies)
