Netflix Subscriptions Surge Amid US Password Sharing Crackdown

Netflix subscriptions experienced a significant increase as the long-awaited crackdown on password sharing in the U.S. began, according to data from streaming analytics company Antenna.

Between May 25 and May 28, Netflix gained a substantial number of new subscribers in the U.S., marking the highest four-day period for new subscriptions since Antenna started tracking such data in 2019.

This influx of users is a clear indication that Netflix’s decision to tackle password sharing is yielding positive results. The company revealed that over 100 million people worldwide access Netflix content using borrowed passwords.

To discourage password sharing, Netflix implemented new measures. Netflix now requires users who share accounts outside of the same household to pay an additional $7.99 per month to access content. The company also imposed limits on the number of extra members that customers can add to their accounts, based on their chosen service tier.

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Sharing an account with an additional person now costs $2 less than a basic subscription but $1 more than the ad-supported plan, which Netflix introduced last year to attract price-conscious customers and boost revenue.

Since the implementation of the password-sharing crackdown on May 23, Netflix’s stock has risen approximately 13%.

Antenna gathers consumer information from third-party services, with proper consent, including online purchase receipts, bills, and banking records. It’s worth noting that the data does not include subscriptions obtained through bundles. Netflix declined to comment on the findings.

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In 2020, Netflix experienced two consecutive quarters of subscriber losses for the first time in its history. While the subscriber base has been growing again in recent quarters, the pace is slower compared to the early days of the pandemic. The company had postponed its password-sharing crackdown initiative for years, despite identifying it as a significant issue internally in 2019, as reported by The Wall Street Journal.

In its first-quarter shareholder letter, Netflix stated that account sharing undermines its ability to invest in and enhance the platform for paying members, as well as hinder business growth.

Netflix has already expanded its password-sharing crackdown beyond the U.S., implementing similar measures in countries such as Canada, Spain, Portugal, and New Zealand.