Netflix: Actions against password sharing ‘completely successful’ | News
At the UBS Global Media and Communications Conference today, Netflix co-CEO Ted Sarandos said he was “quite satisfied” with measures taken to limit password sharing. In 2022, the streaming giant began testing bans on sharing passwords, initially in Latin America. In February 2023, the restrictions were extended to Canada, New Zealand and also some European countries. After only three months, the campaign reached Germany, the United States and Great Britain. With the gradual introduction, the company took things slowly so it could evaluate the reactions – after all, this behavior had been tolerated for more than a decade (see ).
Declining sales as a catalyst
Surprisingly, in the first quarter of 2022, for the first time in Netflix’s history, there was a decline in the number of subscribers and, as a result, a sharp decline in sales. From there, the mission seemed clear: password sharing had to stop, subscription prices had to increase, and an ad-funded offering had to be made. According to Netflix, at least 222 million paid households shared their password with another 100 million unpaid households. The company gained more than six million new subscribers in the second quarter of 2023, and another 8.8 million subscribers were added in the third quarter.
Many initiatives have achieved success
Since then, it is no longer allowed to pass the family password to people who do not live in the same household. Cheating is out of the question, as Netflix is keen to check it. Among other things, the streaming provider uses IP addresses and location data to prevent unauthorized sharing. Subscribers who wish to share their password with people outside their immediate family will be charged an additional fee, making this endeavor unattractive. However, the introduction of an advertising-financed offer, aimed primarily at new customers who have previously “looked” at the family model, also contributes to the “satisfaction” of the group. The increase in individual subscription rates also plays a role in Netflix’s overall account.