Password sharing is a no-no for streaming services, however, the fact that major streamers like Apple TV+ and Disney+ allow subscribers multiple profiles, and even multiple simultaneous streams, makes it pretty tempting and easy to do. Netflix, on the other hand, is not keen on subscribers who are “loose-lipped” with their passwords. And if they can charge people extra for it to make more revenue, they just might very well try it.
When CivicScience gathered data, they found that 23% of respondents share accounts on Netflix without paying for it.
In addition, nearly half (48%) of users would be less likely to share their accounts with others not in their immediate household if they were charged extra for doing so. Whereas 26% of people would probably still share it anyways, regardless of the cost (if that doesn’t scream “loyalty” I don’t know what does).
Taking it even further, when asked if they would cancel that subscription altogether as a result of the extra charges, nearly half (45%) were extremely likely to say “good riddance” to that streaming subscription altogether.
In 2022, the percentage of people who have never shared their streaming service account dropped to 67%. In 2021, 71% of people were not sharing their accounts, which could indicate that more people are practicing the “sharing is caring” philosophy when it comes to streaming.
Also according to the data, the amount of users who are currently sharing their accounts increased by 4%. This increase was equal to the number of people who used to share, but don’t anymore.
It becomes an interesting question whether it’s worth it at all for Netflix to take the risk to begin charging customers more for the mainstream concept of password sharing. Maybe a more effective strategy for the streamer would be to encourage newly single people to simply change their passwords, but that’s just a suggestion.
In March 2021, Netflix announced tighter measures to crack down on password sharing. Just last week, they came down even harder. This new feature is only being tested in Chile, Costa Rica, and Peru for now, and charges primary account holders an extra fee to add up to two users outside of their households on top of the already steep subscription price. Like all tests, it is unclear if this feature will be rolling out worldwide.
John Blackledge, an analyst with Cowen & Co., believes that the new Netflix test could be a moneymaker if/when rolled out globally. As a matter of fact, Blackledge predicts the annual revenue would increase by 4%, or $1.6 billion. “We think Netflix’s recent efforts reflect a natural progression across more mature markets and could add incremental subs and revenue if the test is rolled out globally,” Blackledge wrote.
Despite the data, analysts think it will boost subscriber growth. “I suspect that a crackdown will result in 5 percent subscriber growth, partially or fully offset by an increase in churn, and it won’t impact financials much, if at all,” Wedbush Securities analyst Michael Pachter tells The Hollywood Reporter. “I think they are doing this now because growth has stalled to a crawl.”
According to Enders Analysis’ Tom Harrington, “Of, say, the 15 to 20 percent of users that are getting the service for free, some will subscribe or bolt on to the account they are currently leeching off. Few of the paying subs will unsubscribe, with their immediate value remaining the same. A clampdown will be a net positive for Netflix.”
Essentially, many believe the account-sharing fee would be an easy win for the behemoth, regardless of if users will either stop sharing or altogether cancel their Netflix subscription.
This story was prepared by and excerpted from CivicScience.com, conducting ongoing consumer research via a wide range of websites.
