Netflix Already Has Taken Your Password

Netflix said it would no longer allow people to share passwords. Password sharing was losing the company what was likely to be hundreds of millions of dollars a year worldwide. The new password crackdown in the United States. (These companies have the worst reputations.)

One worry Netflix management had was that people would cancel subscriptions because they were losing the “right” to share passwords. While subscribers never had that right, it had become an entitlement. New research shows that Netflix made the correct decision.

Research firm Antenna looked at how many people paid for their subscriptions when they lost the ability to share those of others. The effect was huge. The researchers wrote, “Since alerting subscribers in the United States that it would begin to curb password sharing on May 23, 2023, Netflix has had the four single largest days of U.S. user acquisition in the four and a half years that Antenna has been measuring the streaming service.” This amounted to about 100,000 new subscribers on both May 26 and May 27.

Two days is not a pattern. However, since this happened immediately after password sharing was abolished, the figure probably went much higher through the end of May and into early June.

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The effects of the surge in accounts will drive a significant change in Netflix earnings. Netflix had 232.5 million subscribers at the end of the most recent quarter. Netflix’s subscriber additions have slowed or even stopped in some quarters. If the password decision triggers adding a million new customers, Netflix may return to the growth mode it enjoyed for over a decade.

ALSO READ: Most Watched Netflix Original Movies and TV Shows of All Time

It is hard to underestimate the ability of the largest video streaming services to add new customers. The competition has become vicious, particularly among Disney+, Amazon Prime, Netflix and Hulu. There are a handful of smaller services as well. Most research shows that a typical household has four video streaming subscriptions. This ability to get and hold subscribers is based on content and price. Disney+ underpriced its service. Thus, it had subscription growth but lost billions of dollars in the process.

Netflix has found a winning formula.

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