Earlier in 2023, Netflix launched its strategy to block viewers from sharing passwords in a bid to bring in more money. With nearly 6 million new subscribers, the bet seems to have paid off.

Netflix reported its biggest surge in paying viewers — nearly 6 million — since the early days of the pandemic, as its strategy to crackdown on password sharing pays off.

The media streaming platform added 5.9 million subscribers in the second quarter and now has over 238 million paying patrons, it said in an earnings release on Wednesday.

The company has been working to eliminate the practice of shared passwords between viewers since May, in an attempt to improve its profitability. It had earlier said that more than 100 million households were sharing Netflix accounts.

"Let's face it, the crackdown on passwords is working," Navellier and Associates chief investment officer Louis Navellier said about Netflix's updated figures. "I was ecstatic with the results; I think they hit the ball out of the park with subscriber growth."

First tested in limited countries including the US and Germany, Netflix said it plans to expand this strategy to other markets worldwide.

After the work-from-home induced rise in viewership since 2020, global inflationary pressures reflected a slowdown in the company's earnings since the beginning of 2022.

Netflix introduced a low-price option, which included commercials, and started blocking shared passwords, forcing customers who were using them to formally join the platform. Account holders also have the option of paying an extra $8 (Є 7.14) in the US to allow families living in different households to share accounts.

Despite initial market skepticism, more Netflix users have finally chosen to pay for the service rather than cancel.

The company's revenue rose 2.7% year-on-year in the second quarter, albeit lower than market expectations.

Netflix's quarterly success did not reflect on the stock market as shares fell more than 8% in after-hours trading in the US, partly because of the ongoing writers and actors strike.

Netflix, in a letter to its shareholders, warned that "quite a competitive battle" was unfolding against the backdrop of the strikes by the talent unions which threatens to block the otherwise steady pipeline of shows to the streaming service.

Analysts believe Netflix is better equipped to weather the storm compared to its peers.

"We are constantly at the table negotiating with everyone across the industry," Netflix co-chief executive Ted Sarandos said during an earnings presentation. "We need to get this strike to a conclusion so that we can all move forward."