Netflix scraps cheap ad-free plans in bid to drive users towards expensive deal

Netflix added nearly 6m more subscribers over the spring as a clampdown on password sharing forced customers to fork out for their own accounts.

The company gained 5.9m paying customers in the second quarter of the year – taking the total to 238.4m. It was well above the 1.8m additions anticipated on Wall Street.

The bumper subscriber figure came after Netflix started a crackdown on millions of subscribers that share their logins with friends and family. It is thought that a quarter of Netflix’s 15m subscribers in Britain share their password.

Netflix, which streams shows such as Emily in Paris (pictured) noted that its Basic plan, which was priced at £6.99 per month, would no longer be available to new or re-joining members

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: ‘Netflix’s account sharing crackdown was an inconvenient hammer-blow for those of us who had their viewing interrupted, but it’s supercharged the streaming giant’s subscriber base. 

The sheer strength of Netflix’s appeal means millions opted to set up their own legitimate accounts where there had been concerns the move would trigger a mass exodus.’

Netflix has also been rolling out its advertising-supported option to viewers, which provides a cheaper subscription for cash-strapped consumers and a whole new stream of revenue for Netflix through ads. 

This costs £4.99 a month in the UK. Netflix said it had expanded its sharing crackdown to over 100 countries and following the results it would extend the policy to its remaining territories.

The subscriber surge came as the firm reported a profit for the three months to June of almost £1.2billion, up from £1.1billion the previous year whilst revenues inched up 2.7 per cent to £6.3billion.

The jump in subscribers will provide some welcome relief for Netflix after it endured a rocky 2022, announcing its first fall in paying members for over a decade in the first half of the year.

In the second quarter of last year, it lost almost a million subscribers –sending shares into freefall and shattering Wall Street confidence.