Netflix subscriber adds disappoint after delaying password sharing crackdown

Originally Published: 18 APR 23 16:15 ETUpdated: 18 APR 23 16:38 ETBy Clare Duffy, CNN

    (CNN) -- Netflix on Tuesday posted weaker-than-expected subscriber growth for the first three months of this year, causing its stock to fall as much as 8% in after-hours trading before rebounding somewhat.

The company reported a net increase of 1.75 million global streaming subscribers, up nearly 5% from the same period in the prior year, but below the more than 3 million Wall Street analysts had expected.

The disappointing subscriber growth came as Netflix delayed its plan to crack down on password sharing. Netflix had said last quarter that it would roll out paid sharing — a charge for having multiple users on a single account — at the start of this year, but said Tuesday that it decided to delay the broad launch until the second quarter.

"While this means that some of the expected membership growth and revenue benefit will fall in Q3 rather than Q2, we believe this will result in a better outcome for both our members and our business," the company said in its shareholder letter.

Tuesday's earnings report marks the first for new co-CEOs Greg Peters and Ted Sarandos, after founder Reed Hastings handed over the role and became executive chairman in January.

It was a crucial quarter for Netflix, as the company seeks to grow a number of new revenue opportunities following rocky performance last year, including shedding 200,000 subscribers in the year-ago quarter, which sparked a major selloff.

Netflix reported revenue of around $8.2 billion for the quarter, up nearly 4% from the same period in the prior year and in line with analysts' projections. The company's quarterly income fell 18% to $1.3 billion.

The report comes days after Netflix bungled what was supposed to be its second-ever live show — the season 4 "Love is Blind" reunion — and had to apologize to frustrated fans and tape the special for streaming. Unlike its streaming rivals, Netflix had long been resistant to live streaming because of its high costs. But, facing steeper competition, Netflix has started to experiment with the format, one it apparently has not yet perfected.

The-CNN-Wire
™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.