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Netflix is already losing masses of customers over its password-sharing ban. Here’s how it’s clamping down around the world.

Netflix logoNetflix is cracking down on password sharing.

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  • Netflix is pushing ahead with its password-sharing clampdown.
  • The streaming giant has said its US crackdown will start in the current quarter. 
  • In Spain, users have gone on a canceling spree. Here’s how the clampdown works.

Netflix is pushing ahead with its password-sharing clampdown — and research shows that scores of customers have gone on a canceling spree.  

In the US, the streaming giant said its crackdown on password sharing will start in the current quarter. The proposed plans have been met with fierce backlash from some customers, several of who threatened to cancel their accounts if the rules were enforced.

However, the policy has already been rolled out in several countries.

In Spain, where password-sharing rules were enforced in early February, Netflix subscribers have been on a canceling spree, per Bloomberg.

Citing research from Kantar, Bloomberg reported that Netflix lost more than one million users in Spain during the first three months of 2023. Subscription cancellations in the first quarter tripled compared with the previous period, per Kantar’s research.

The reaction is not entirely unexpected. In an earnings call in January, Netflix co-CEO Greg Peters said the company was expecting to see “a bit of a cancel reaction” to the policy. In its first-quarter earnings release on April 18, Netflix said the company expected the dip to be temporary before “borrowers” started signing up for their own accounts. 

How it works

Netflix has said it can detect when passwords are shared outside a household, which it defines as people who live in the same location as the account owner.

The company previously said it uses a combination of IP addresses and device IDs to determine if an account is being used in the correct location. If users want to share their account with someone outside their household they can buy an “extra member” and add them to the account, according to Netflix’s help center. This feature is only available in some countries. 

Paid sharing was initially tested in Costa Rica, Chile, and Peru, where it costs the equivalent of around $2 to $3 to add an extra member account.

This was later extended to include New Zealand, Canada, Spain, and Portugal.

The extra member prices differ across countries. In New Zealand, the service costs NZ$7.99 ($5.09) per month, in Canada it costs CAN$ 7.99 ($5.96) per month. In Spain, the service costs 5.99 euros ($6.45), and in Portugal, it’s 3.99 euros ($4.30).

The company has compared Canada’s reaction to the new policy with what it hopes to achieve in the US.

“In Canada, which we believe is a reliable predictor for the US, our paid membership base is now larger than prior to the launch of paid sharing and revenue 4 growth has accelerated and is now growing faster than in the US,” the company said in a letter to shareholders after its first-quarter earnings release.

Netflix has tested other rules aimed at stamping out password-sharing, including temporary-access codes for traveling, Insider previously reported.

Netflix did not immediately respond to Insider’s request for comment made outside of normal working hours. 

Read the original article on Business Insider
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