Following the close of the market on Tuesday, Netflix (NASDAQ: NFLX) reported its earnings for the first quarter of the new season. Although the results surpassed expectations, the company's guidance fell below projections, even with the rollout of its ad-supported option. Despite adding 1.75 million subscribers, an improvement from last year's loss of 200,000 during the same period, the figures missed the estimate of over 2 million new net additions. Additionally, the company projected that the number of paid net adds in Q2 '23 would be "roughly similar" to that of Q1.
As a leader in the streaming industry, Netflix's performance is a critical indicator, given the industry's slowed growth due to increased competition. The company's stock declined 1% in after-hours trading. Regarding the conversion of “password sharing users” to paying users, Netflix declared its intention to implement its paid account sharing feature across a wider market in Q2, following a delay in the previous quarter. Earlier this year, the streaming service began restricting password sharing in four countries, but did not expand it any further after discovering opportunities for improvement in earlier launches. Netflix is set to introduce a new feature that allows its users to include two more individuals to their Standard or Premium plan. However, an additional fee will be charged for each person, which will likely be approximately $6, based on the Canadian model. This adjustment may be implemented in the United States, but this has yet to be confirmed.
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