On Tuesday, Netflix reported its Q1 earnings, with results largely in line with market expectations. The topline numbers for the streamer were that it added 1.75 million new subscribers, grossed $8.16 billion in revenues, and earned $1.3 billion in profit. The company’s stock price remained mostly unchanged by the report.
In their earnings call with investors, co-CEOs Ted Sarandos and Greg Peters focused on the rollout of key initiatives in the works, specifically the upcoming crackdown on password sharing and the build-out of their advertising-supported tiers of service.
The password-sharing crackdown in the U.S. is expected to roll out in the months ahead. Netflix has already implemented the program in key international markets including Spain, Portugal, and New Zealand. While some subscribers dropped the service, that decline was more than made up by new subscribers who chose to sign up for their own accounts after previously logging in with the credentials of a friend or family member.
The password-sharing crackdown will be crucial to Netflix’s next phase of growth. An estimated 100 million Netflix users are thought to share passwords currently, and converting even a small percentage of those users to paying subscribers will translate to billions in new revenue for the company.
Sarandos and Peters reiterated their opposition to releasing their feature films theatrically, despite Apple and Amazon’s recent steps to enter the theatrical space. The execs explained that those competitive services do not have the same scale and reach as Netflix, and are making decisions based on different business dynamics.
See also: Netflix Co-CEO Ted Sarandos: “Driving Folks to a Theater Is Just Not Our Business” (Hollywood Reporter)