Netflix’s crackdown on password sharing pays off: Streaming giant adds 13 million subscribers and now tops 260 million worldwide, cementing its place as the world’s most popular service

For those of us still logged into our roommate’s ex’s Netflix account, the crackdown on password sharing may have been quite annoying.

But for Netflix, this gamble is finally paying off, as the service added 13 million new subscribers by the end of 2023.

Despite losing subscribers in 2022, Netflix has now firmly cemented its place as the world’s most popular streaming service.

But even as it makes record profits, Netflix says it plans to raise prices even further.

Co-CEO Greg Peters said: ‘The summary statement could be ‘back to business as usual’.’

Netflix’s latest quarterly report, which covers the three months to December 2023, shows that year-over-year subscriber growth was 12.8 percent.

This was the fastest growth since 2020 and continues a streak of gains that started last year after a shaky 2022.

Netflix now retains the top spot as the most popular streaming service in the world, ahead of Amazon Prime Video, which has 220 million subscribers worldwide.

In December 2023, Netflix accounted for nine percent of all viewing in Britain, while Prime Video claimed just three percent.

In the US, Netflix accounted for eight percent of all TV viewing figures, while Prime and Disney accounted for just three and five percent respectively.

However, many of the new subscribers opted for Netflix’s cheapest plan, which included ads.

In the twelve countries where advertising is offered, including Great Britain and the US, these subscriptions accounted for 40 percent of new subscribers.

Currently, the cheapest plan with ads costs £4.99 ($6.99), compared to £10.99 ($15.49) for the ad-free plan.

A premium subscription, including HD streaming and additional members, now costs £17.99 ($23).

Netflix recently increased the price of basic and premium subscriptions by £1 (£2) and £2 ($2) respectively.

But despite profits reaching $5.4 billion (£4.23 billion) this year, up from $4.49 billion (£3.52 billion) the year before, Netflix says it is now preparing to raise prices again .

Mr Peters told an analyst call: ‘We largely suspended price increases as we rolled out paid sharing. Now that we’ve gotten through that, we can resume our standard approach.’

Netflix also made the surprise announcement that it would be eliminating its cheapest ad-free options in some countries.

Company executives told investors that it would begin discontinuing the £7.99 ($11.99) plan in Canada and the United Kingdom from April this year.

Netflix no longer allows new or returning subscribers to sign up for the Basic plan, so the change only affects existing members.

Subscribers are forced to choose between paying for the more expensive subscription or accepting advertisements.

In the early months of 2022, Netflix started worrying investors when it lost subscribers for the first time.

In the second quarter of 2022, Netflix lost 970,000 subscribers, after losing 200,000 in the first quarter.

Startled by the sudden losses, Netflix started raising its prices and cracked down on password sharing.

Millions of people were banned from lending streaming accounts to anyone outside their household as the streaming giant tightened rules in more than 100 countries.

From March last year, Netflix switched to a ‘paid sharing’ system, charging households an extra fee to let extra people use their accounts.

Although this measure was never enforced with fines, the threat of discovery now appears to have been enough to turn Netflix’s fortunes around.

Ben Barringer, technology analyst at Quilter Cheviot, said: “These numbers underscore the fact that Netflix has ultimately won the streaming wars.

“Older TV companies simply haven’t been able to keep up, and with many more companies returning to licensing their back catalog to Netflix, their dependence on the streaming giant will only increase.”

This follows a number of other wins for the streaming platform, including 18 Oscar nominations.

The Netflix original film Maestro, starring Bradley Cooper and Carey Mulligan, was nominated for Best Picture on Tuesday.

Netflix also announced it would be bringing WWE Raw, the most popular weekly pro wrestling show, to the platform.

The company announced it had signed a $5 billion (£3.9 billion) deal to show the wrestling show from January 2025.

This marks the first time Raw has left linear television since its inception 31 years ago.