Netflix Inc beat Wall Street earnings estimates for the first quarter but offered a lighter-than-expected forecast on Tuesday, demonstrating the challenges the mature streaming service faces in its pursuit of growth, reports Reuters.
The company said it shifted a wider launch of a plan to crack down on unsanctioned password sharing into the second quarter to make improvements, delaying some financial benefits, but said it was pleased with results so far.
As the streaming video pioneer faces signs of market saturation, it is looking to new ways to make money, such as the password crackdown and a new ad-supported service.
"We are growing and we are profitable," Co-Chief Executive Ted Sarandos said in the company's post-earnings video interview. "We have a clear path to accelerate growth in both revenue and profit, and we're executing it."
According to The Wall Street Journal, Netflix added 1.75 million subscribers in the first quarter and ended the period with 232.5 million customers, a far slower pace of growth than it was accustomed to before and during the pandemic. After losing subscribers for the first time in a decade a year ago, the company took a series of steps to expand its customer base, including launching an ad-supported tier of service and starting to limit password sharing.
The company has said that getting every Netflix user to pay—either by forcing people who use other people’s accounts to sign up for their own or having account owners pay extra to share it with people outside their household—could generate an important source of new revenue. More than 100 million people watch Netflix using borrowed accounts, Netflix said.
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