Netflix’s crackdown on password sharing cost it one million users in Spain in Q1 2023 new study by market research group Kantar. This translates into a decrease of about 15% in the total number of users.
The streaming platform introduced the new measures in Spain in early February, charging a monthly fee of €5.99 to users who share their passwords with other households. According to Kantar, this is directly related to the decline in the user base in the country.
Of the one million users who unsubscribed from Netflix, two-thirds benefited from password sharing. A third actually paid for the account, which means a loss of subscribers, resulting in a negative impact on revenue.
At the same time, the study showed that the number of subscription cancellations in the first quarter of this year almost tripled compared to the previous period. In addition, 10% of the remaining subscribers in Spain plan to cancel their subscription in the second quarter of 2023.
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Meanwhile, competition in the country is increasing, with Amazon Prime Video accounting for the majority of new subscriptions at 34.4%, followed by the newly launched Sky Showtime at 32.6%.
“There are of course inherent risks in restricting password sharing, especially when Netflix was seen actively encouraging it in 2017,” said Dominic Sunnebo, Global Insight Director at Kantar’s Worldpanel Division. “Some users were expected to be lost in the process, but the loss of over a million users in just over a month has major implications for Netflix and whether its decision to continue its crackdown globally.”
Love is sharing a password.
— Netflix (@netflix) March 10, 2017
In addition to Spain, the streaming platform has its so far new password policies in Portugal, Canada and New Zealand, after testing in several countries in Latin America. According to Netflix estimates more than 100 million households share a password.
“We have people watching Netflix who don’t pay us as part of borrowing someone else’s credentials,” Gregory Peters, the company’s COO and CPO, said at the press conference. last earnings call.
“Our goal this year is to basically work through that situation and convert a lot of those people into paid accounts, or have the account owner pay for it,” Peters added, pointing out that “a cancellation response” to that will be expected in the beginning.
And while Netflix has fallen from its targets for new subscribers in the first quarter of 2023, the company believes the new password policy combined with cheaper add-based plans will drive growth in the second half of the year.
It remains to be seen whether the decrease in the number of users in Spain is just an expected short-term pitfall, or a clear indication that Netflix’s plan will cost it even more subscribers.