An experiment to flush out freeloaders might just pay off for Netflix. The streaming group added 13.1 million subscribers in the three months to the end of December, its largest fourth-quarter subscriber growth on record, easily beating a consensus forecast of 8.97 million.
Netflix is maturing in an increasingly competitive market. That has forced the Santa Clara-based group, which started out as a DVD rental postal service in 1997, to search for more diverse ways to cash in on its content. Price increases are a blunt instrument, particularly when many household budgets remain squeezed.
Instead, it has decided to launch a cheaper plan with advertising and is cracking down on password-sharing between households. The with-ads subscription tier accounted for 40 per cent of new
