Netflix password crackdown pays off in new subscribers

A burst of people signed up for Netflix this spring, after the streaming giant cracked down on password sharing.

The company ended June with more than 238 million subscribers, adding 5.9 million members since March.

That was bigger than expected and follows efforts by the company to re-ignite growth following unusual subscriber losses last spring.

Netflix said customers were enticed by new options it has introduced that cost less than a standard subscription.

It has started charging users to share passwords with people outside their households, asking a fee that amounts to a little less than half of a standard monthly subscription, which costs £10.99 in the UK.

The "paid sharing" programme was introduced in the UK, US and other major markets in May and is now present in more than 100 countries.

The company also launched a less expensive streaming plan with ads last year and cut prices in dozens of countries in February.

Netflix said few people had cancelled as a result of the changes and it believed the programme would fuel growth in the months ahead.

It has estimated that more than 100 million households share passwords in breach of its official rules.

Despite the subscriber gains, the $8.18bn in revenue it reported disappointed investors, rising just 2.7% from last year.

Shares, which have surged 60% this year amid investor enthusiasm for the company's plans, dipped in after-hours trade.

"While we've made steady progress this year, we have more work to do to reaccelerate our growth," Netflix said in its quarterly investor update.

"We remain focused on creating a steady drumbeat of must watch shows and movies; improving monetisation; growing the enjoyment of our games; and investing to improve our service for members."