Netflix Imposes Charges for Sharing Passwords, Leading to an Increase in Subscribers

Illustration of Netflix(Techfitnow.com/NUNU)

The number of paying Netflix subscribers has rebounded after the company took firm action against password sharing practices. Hundreds of thousands of people have started subscribing to Netflix, especially after the video streaming service began implementing additional charges for customers who share their passwords with others. This policy came into effect in the United States on May 23, 2023. According to Antenna, a data streaming analytics company, Netflix experienced a significant surge in its daily average number of paying subscribers, which increased by 73,000 per day. On May 26-27, the registration numbers even reached up to 100,000 per day. "Based on the latest available data, Netflix found almost 100,000 daily registrations from May 26 to May 27," Antenna stated in a post on its official website. According to Antenna, this figure represents a 102% increase compared to the average of the previous 60 days.

Moreover, these numbers are also higher compared to the peak growth of Netflix subscribers during the initial lockdown period in March-April 2020. At that time, the number of new subscribers did not exceed 90,000. Despite the increase in the number of subscribers, Netflix also observed cancellations from customers since May 23. However, the number of customers who canceled their subscriptions was not as high as the number of new subscribers during the same period. It should be noted that this data is sourced from a third party, as Netflix has not disclosed its own collected data, as reported by KompasTekno from Cnet.

Additional cost of Rp 119,000 per month

Netflix officially introduced an additional fee for users who wish to share their passwords on May 23. This policy was implemented by Netflix in the United States and several other countries.

The additional fee is charged on top of the monthly subscription. If users want to share their account with someone outside their household, they must pay an additional fee of $7.99 or approximately Rp 119,000 per month. By paying this extra fee, additional members (outside the family/household) will receive their own password and profile. However, these additional members will not be able to create additional profiles. It is important to note that additional members must be activated in the same country as the primary user. Additionally, they can only stream and download content on a single device. Through this approach, Netflix aims to encourage users to create or subscribe to their own Netflix accounts rather than becoming additional members with limited benefits.

Driven by a drastic decline in paying subscribers

The idea of the additional fee was triggered by the decrease in Netflix's subscriber count in Q1 2022. During that period, Netflix lost 200,000 paying subscribers worldwide. This decline in paying subscribers was the first in the last 10 years. The last time Netflix lost subscribers was in October 2011. In a written letter addressed to Netflix shareholders, password sharing was identified as the primary factor contributing to the company's loss. In Q1 2022, Netflix estimated that there were 222 million households paying to access its video-on-demand service. However, on the other hand, account access was shared with over 100 million additional households through the habit of password sharing. This practice goes against Netflix's policy, which allows sharing of extra accounts for family members but prohibits sharing accounts in other ways. As a result, Netflix imposed additional charges on users who frequently share their accounts outside their households to watch movies on Netflix.