Netflix Subscriptions Jump After Password-Sharing Crackdown



Netflix’s long-awaited crackdown on password-sharing in the U.S. delivered a windfall of new subscribers in its earliest days, according to new data, The Wall Street Journal reported.

According to streaming analytics company Antenna, the streaming giant amassed more new subscriptions in the U.S. between May 25 and 28, shortly after Netflix notified users of the limits, than in any other four-day period since Antenna began compiling such data in 2019.

The change, which is upending yearlong password-sharing arrangements between families and friends, is critical to Netflix’s growth: The streaming giant and its rivals are struggling to bring in new subscribers, particularly in the U.S. market, where consumers can choose from a range of services that are easy to turn on and off.

Netflix has said more than 100 million people around the world watch its content using borrowed passwords.

According to The Wall Street Journal, the monthly cost of sharing with an extra person is $2 less a month than a basic subscription, and $1 more than the ad-supported plan, which Netflix introduced late last year in another effort to boost revenue and appeal to price-conscious customers.

Variety reported that according to New York based Antenna, its estimates are based on millions of permission-based, consumer opt-in, raw transaction records, which are sourced “from a variety of data collection partners.” The data includes online purchase receipts, credit, debit and banking data, and “bill-scrape data.”

Based on the most current Antenna data available, Netflix average daily sign-ups reached 73,000 from May 25-28, a 102% increase from the prior 60-day average. That was more than the spikes in subscriber sign-ups Antenna recorded during the initial U.S. COVID-19 lockdowns in March and April 2020.

Engadget reported that while account cancellations also rose in that period, Antenna said sign-ups outpaced those figures. This was the biggest increase in new Netflix account sign-ups in the US since COVID-19 lockdowns began in March and April of 2020, Antenna noted.

According to Engadget, it is worth bearing in mind that this is not official data from Netflix. We’ll have a clearer idea of how account sharing changes are starting to impact Netflix’s bottom line when the company reports its next quarterly earnings, likely in mid-July.

In my opinion, despite the initial pushback against sharing a Netflix account, it appears that plenty of people decided to give in and pay Netflix for a subscription. Right now, that looks like a win for Netflix. That said, Netflix should not assume that every month will have as many subscriptions. At some point, the company will run out of people who want to subscribe to Netflix.