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What's going on?

Netflix reported show-stopping quarterly subscriber growth late on Thursday.

What does this mean?

Netflix warned of buffering growth this time last year, which shook investors and sent a ripple through the streaming industry. But recent data from Nielsen suggests the firm’s still got it: Netflix hosted 80% of the most-watched streaming titles last quarter – think Glass Onion and Wednesday. That showed in its latest results: the streaming giant counted nearly 8 million new subscribers, way more than its 4.5 million forecast – good thing too, as that would’ve marked its weakest growth since 2014. Now, Netflix did admit that earnings slipped below expectations, and that its co-CEO is dipping out of the role. But investors seemed laser-focused on those blockbuster subscriber stats, and initially sent Netflix’s shares up 8% after the news.

Why should I care?

The bigger picture: Farewell, freeloaders.
Still, Netflix’s pool of potential customers might be drying up, with roughly 80% of Americans already paying for at least one streaming service. But some analysts are optimistic that Netflix’s new cheaper ad-supported plans will attract budget-conscious entertainment-seekers around the globe. And the savvy streamer has spotted an even bigger opportunity right under its nose: Netflix plans to crack down on password sharing this year, and if it convinces just 10% of scroungers to get their own accounts, it’ll rack up 10 million new paying customers.

Zooming out: Netsoft and Microflix.
Some analysts have speculated that Netflix’s recent dipping valuation could tempt Microsoft to scoop up the firm, and that wouldn’t be a total bolt from the blue: after all, Microsoft hasn’t exactly been shy about its ambitions to launch a video-game streaming service. But before the titan can even think about adding the platform to its shopping list, it’ll need to get its last big purchase, Activision Blizzard, past regulators. And that’s not to mention the expensive technical nightmare of moving Netflix from Amazon’s cloud to Microsoft’s own one…

Originally posted as part of the Finimize daily email.

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