Netflix’s efforts to combat password sharing are proving successful, as the streaming giant reported a significant surge in subscribers following its crackdown on account sharing beyond household members. During the second quarter of 2023, the company added nearly 6 million paying subscribers, representing an impressive 8% increase, confirming the effectiveness of their measures.
According to Netflix’s letter to shareholders, the push to stop password sharing has not resulted in widespread cancellations. Instead, it has encouraged more users to sign up for their own accounts. The company stated, “The cancel reaction was low, and while we’re still in the early stages of monetization, we’re seeing healthy conversion of borrower households into full paying Netflix memberships as well as the uptake of our extra member feature.”
To address the issue proactively, Netflix introduced a “paid sharing” option, allowing subscribers to add an “extra member” to their account for $8 per month. This feature is now available in over 100 countries. Additionally, the company streamlined its plans by discontinuing its $10 “basic” plan in the United States and the UK after already doing so in Canada.
Netflix intends to continue restricting password sharing in the few remaining countries where it has not yet implemented these measures. These countries include India, Indonesia, Kenya, and Croatia. In these regions, the “extra member” option will not be offered as the company has already reduced prices. Instead, users can use Netflix’s tool to transfer their profile to a new account.
Addressing the ongoing strikes among Hollywood’s actors and writers, Netflix acknowledged that it has adjusted its spending estimates, lowering them by $1.5 billion due to the impact of the ongoing strike. Despite the challenging situation, co-CEO Ted Sarandos expressed Netflix’s commitment to finding an equitable solution, stating, “We’re at the table and we’re going to try to get to an equitable solution.”
