Analysis: 35% of Netflix Users Say They’ll Cancel if Password-Sharing Rules Go Into Effect; Is Streamer Wavering?
Netflix occupies a pretty unique place in the streaming industry. At nearly 231 million subscribers, it’s the world’s largest service, and it is frequently named the most essential service by a majority of customers in the United States.
Its popularity is a big reason the service is now in a bit of a bind. Netflix is due to roll out rules to prevent password sharing in the United States sometime during the first quarter of 2023, but a new survey from Forbes shows some pretty ominous warning signs for the company if it carries out those plans. The survey shows that 35% of Netflix users say they’d cancel the service if its password-sharing rules are put into effect.
The data shows that Netflix is not alone in this tenuous position. Users of Disney+, HBO Max, Hulu, Paramount+, Peacock, Prime Video and many others all report their intent to cancel if password sharing rules are enacted at a rate of 25% or higher. Amidst speculation that Netflix’s rules could drive other streamers to put similar restrictions in place, this data should give company executives across the industry pause, especially considering Forbes’ statistic that 54% of streaming users are sharing a password.
Still, Netflix is the furthest along in the process of trying to halt password sharing, and it has the most to lose for now. The Forbes survey also indicates that Netflix is the most popular subscription service, with 24% of respondents saying they used it the most of any streamer.
The company has been very quiet about its password-sharing crackdown in recent weeks, after causing an uproar across the Internet in early February by erroneously posting rules on its American Help Center page that stated (among other things) that users who tried to access Netflix without registering their devices could be blocked.
A few days later, Netflix did roll out new rules to prevent password sharing in Canada and other territories. Those rules require users to verify their devices on home Wi-Fi every month, but omits any mention of blocking accounts or devices. The uncertainty over Netflix’s plans to stop account sharing are likely one of the biggest reasons it was the most-canceled streaming service in late 2022.
Has the silence from the world’s largest streamer since then been an indication that it has doubts about its plans? The company has a wealth of internal data that it does not make public, and it could be using the new rules it recently enacted in Canada against password sharing as a test case before it proceeds. If it’s seeing churn rates anywhere near what the Forbes survey indicates could be in its future if it cracks down on account sharing more widely, it would certainly give Netflix executives good reason to pause.
Thirty-five percent of Netflix’s global customer base would translate to roughly 80 million users. Netflix is estimating that 100 million users share passwords, but if Forbes’ numbers are correct, there’s no financial logic whatsoever behind going through with plans to restrict multiple users on one account.
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.
Netflix offers four plans — on 2 device in HD with their “Standard with Ads” ($6.99) plan, on 1 device in SD with their “Basic” ($9.99) plan, on 2 devices in HD with their “Standard” ($15.49) plan, and 4 devices in up to 4K on their “Premium” ($19.99) plan.
Netflix spends more money on content than any other streaming service meaning that you get more value for the monthly fee.