Last week, Netflix announced that it had seen a quarterly decline in subscribers for the first time in over a decade. The streamer believes that at least one reason behind that drop is the ubiquity of password sharing on the platform. A survey conducted before Netflix’s announcement indicated that 1/3 of streaming subscribers would be interested in paying an additional fee in order to share their passwords with multiple people.
In its recent earnings, Netflix shared that approximately 100 million households worldwide — and 30 million households in the U.S. and Canada — use the streaming service via someone else’s login information. Last month, Netflix announced that it would launch an experiment in Latin America to start to test charging subscribers an additional fee in order to share their account with users outside of their homes; last week, company executives indicated that they would roll out a similar plan in other markets as well.
There seems to be a market for cracking down on password sharing with one-third of streaming subscribers indicating that they would either “definitely” or “probably” pay an additional fee to continue sharing their password, which could be a significant amount of additional revenue for Netflix. However, that is not the only way that making Netflix could benefit from putting the squeeze on password sharing. According to the survey, nearly half of current password-sharers said that they would consider signing up for a subscription of their own subscription if they could no longer use someone else’s password.
When looking at who is most likely to be impacted by Netflix’s added attention to password sharing, according to the data, most instances of password sharing appear to be coming from younger Netflix users allowing parents and grandparents to use their accounts. Baby Boomers, at 16%, are the generation most likely to use someone else’s password to access the service. If younger family members are helping out older relatives who otherwise might not subscribe, there might not be much of a financial benefit for Netflix in attempting to monetize these users — either by charging the younger family members extra for a sub-account to a service that their parents and grandparents don’t often use, or in converting the Boomers into their own paid subscription.
In terms of who was most likely to hand out their password, 41% of Gen Zers say they share their password with someone else, either under the same roof or not.
It’s not only Netflix that has to worry about password sharing. Disney+, HBO Max, and Apple TV+ also had a higher rate of sharing recently, according to the survey. As Netflix is no longer growing in the U.S. at the rate that it once was, they are clearly struggling to find new subscribers and to keep the ones they currently have. So being able to convert any significant portion of the 100 million worldwide password-sharers into some sort of revenue could help turn the company’s fortunes around.
Netflix
Netflix is a subscription video streaming service that includes on-demand access to 3,000+ movies, 2,000+ TV Shows, and Netflix Originals like Stranger Things, Squid Game, The Crown, Tiger King, and Bridgerton. They are constantly adding new shows and movies. Some of their Academy Award-winning exclusives include Roma, Marriage Story, Mank, and Ma Rainey’s Black Bottom.