Netflix, an OTT platform, has declared a crackdown on password sharing for customers in India and every other area after a limited introduction of the restriction helped the business sign up over 6 million members in the quarter ending in June. To boost revenue growth in the ensuing months of 2023, the world’s largest video-streaming service, Netflix, will stop account sharing in Kenya, Indonesia, and other countries starting on July 20, 2023.
Why Did Netflix Stop Password Sharing?
The official statement from Netflix read,
“We will be sending this email to members who are sharing Netflix outside their household in India starting today.”
After understanding it would negatively affect the business’s financial line, Netflix changed its mind on password sharing. In April 2023, Netflix said that by lowering membership prices in India by 20–60% in December 2021, it increased engagement in the country by about 30% yearly—also increased revenue growth to 24% in 2022 from 19% in 2021. Implementing a less expensive ad-supported streaming plan and the ensuing prohibition of password sharing is expected to result in over 100 million people being able to watch its content for free.
According to Netflix, both new and current users may exchange profile information. Moreover, the company announced that it will start notifying Indian customers who share their Netflix account with anybody outside of their family right now.
Ramifications
Last year, it began testing the restriction. In 2023, it expanded to include Canada, New Zealand, Portugal, Spain, and the United States. Users of Netflix who revealed their credentials to others were subject to a surcharge in some areas.
According to a statement released by Netflix, the company’s recent crackdown on password-sharing was a significant factor in the tremendous subscriber growth. The company reported losing almost 1 million customers over the same period the previous year while acquiring 5.9 million members during the most recent quarter. Now that they can no longer bear sharing the service with their pals, more people are paying for their own accounts.
New Membership Option?
Netflix has 238.4 million subscribers worldwide as of the end of June. Further, the company anticipates continued growth from July through September.
Further, the business has stated that it would not be introducing a new membership option for customers in nations that enforce new restrictions on account sharing. Also, in a letter to shareholders, the company said that this choice was taken due to the poor market penetration in some areas and the availability of lower-cost Netflix subscription tiers.
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