Netflix’s recent crackdown on password sharing in the US has yielded positive results, according to a report. The company has experienced significant growth since implementing measures to tackle password sharing in March. It has added over 1 million new subscribers in the US, a substantial increase compared to its previous quarterly growth rate of around 250,000. The streaming giant first hinted last year that it was going to crack down on password sharing as its revenue took a hit following the 2020 bumper harvest.
The report also indicates that Netflix’s revenue has been positively impacted by the password sharing crackdown. In the first quarter of 2023, the company generated $100 million from password sharing fees, doubling the $50 million generated in the same quarter of 2022.
The success of Netflix’s efforts to combat password sharing could serve as a catalyst for other streaming services to follow suit. With increasing competition in the streaming industry, many companies have witnessed a decline in subscriber growth as consumers hesitate to subscribe to multiple services.
By addressing password sharing, streaming services can generate additional revenue from their existing subscriber base. This approach aims to counterbalance the decline in new subscriptions and contribute to the overall sustainability of the streaming industry.
Netflix’s strategy for combating password sharing revolves around a combination of technology and user education. The company utilizes geolocation data to identify account access from outside the user’s household. If Netflix detects such activity, it sends an email to the account holder requesting verification.
In addition to technological measures, Netflix has launched a blog post and dedicated website section to educate users about its password sharing policy.
Other streaming services considering similar crackdowns will need to tailor their approach to their specific circumstances. This could involve utilizing different technologies to track user locations or focusing more on customer education rather than technology. Other services were somewhat sceptical about this as they thought this could affect Netflix overall with users calling for cancellation. But now that it looks like it may have worked for Netflix, I think we can expect more services to start cracking on password sharing. Netflix didn’t make the technology it is using to do this public but it shouldn’t be rocket science for other streaming companies to come up with similar measures.
The impact of preventing password sharing on customers is significant. Some individuals may need to pay for their own subscriptions, while others may find it difficult to share accounts with friends and family.
It remains to be seen how consumers will react to these measures. But the streaming industry is clearly growing, and the introduction of password sharing signals this changing landscape.