In its latest financial report, Netflix announced an increase in revenue and paid memberships during January-March this year.
The company was satisfied with the results and revealed that the “paid sharing” feature, which aims to reduce password sharing, was successful during its trial in Canada, New Zealand, Spain, and Portugal. As a result, the company plans to expand to more markets in Q2.
Revenue saw a 4% year-on-year growth, in line with the beginning-of-quarter guidance. However, operating income decreased in Q1 2023 compared to the same period last year, due to “ongoing expense management and timing of hiring and content spend,” which affected the company’s overall profitability.
The financial outlook for the remainder of the year appears mixed. As the implementation of paid sharing in more markets has been delayed, some membership growth and revenue benefits will likely move from Q2 to Q3.
Additionally, due to currency volatility, operating profit and revenue are expected to remain relatively stable or slightly decline.
In terms of engagement, Netflix confidently stated that it, along with YouTube, is the dominant leader in the streaming market, despite streaming still being a minor part of content viewing in most countries.
The platform highlighted some of its most successful productions, including Outer Banks S3, You S4, Ginny & Georgia S2, and new films and series such as the Oscar-winning All Quiet on the Western Front and Too Hot To Handle Germany.
In December 2021, Netflix lowered its prices in India, which led to improved engagement. The company was so pleased with the results that it also reduced prices in the other 116 markets where it operates during Q1
Although this decision resulted in a 5% decline in FY ’22 revenues, the company anticipates that increased adoption in these markets will help offset the short-term impact in the long run.
The new ads plan has already attracted customers in the United States, prompting Netflix to expand it to Canada and Spain, starting today.