A Netflix crackdown on password sharing paid off in Q2 in terms of subscriber gains, though a strike by professional actors and scriptwriters could hinder future growth.
The streaming company booked net additions of 5.9 million, up 8 per cent year-on-year, taking its total subscribers to 238.4 million.
PP Foresight analyst Paolo Pescatore told Mobile World Live a decision to end to password sharing was a short-term measure and Netflix needs to consider its pricing strategy for the mid-to-long term.
“During this transition there will ongoing challenges and expect to see spikes in churn, net adds and ARPU with the rollout of new features and services such as advertising.”
While other streaming companies are their increasing prices, Pescatore noted Netflix “is now extremely competitive with its ad tier” and had positioned itself for “future revenue growth”.
“The company is still in a far stronger position compared to rivals and remains the benchmark”.
For all that, net income was flat at $1.4 billion, on revenue of $8.1 billion, up 2.7 per cent.
Netflix forecast net income of $1.5 billion and revenue of $8.5 billion for the current quarter.