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Netflix’s Crackdown on Password-Sharing
Netflix recently implemented a policy to crack down on password-sharing in the United States. This means that people on a shared account who do not live in the same house as the account owner must either sign up for their own account or leave. As a result of this change, Netflix subscriber numbers are reportedly increasing.
Study Shows Increased Sign-Ups
According to a study by research company Antenna, Netflix had the four single-largest days of US subscription additions since 2019 after the password-sharing changes went into effect in late May. Netflix reportedly added almost 100,000 new sign-ups on May 26 and May 27. Average daily sign-ups after the password-sharing changes jumped by 102% compared to Netflix’s previous 60-day average, and new sign-ups were reportedly higher than even the spikes that came during COVID lockdowns.
Membership Cancellations and Overall Increase in Sign-Ups
While the number of membership cancellations also increased after the password-sharing changes went into effect, it was not enough to offset the overall increase in new membership sign-ups. Therefore, Netflix reportedly gained a net increase in subscribers.
Third-Party Figures
It is important to note that these figures come from a third-party and have not been confirmed by Netflix. Netflix will provide further insight and data about the change in its first earnings report since the crackdown, which is set to release in July.
New Rules for Shared Accounts
Under the new policy, anyone who benefits from password-sharing must either sign up for their own account or move on. Account owners who want to keep non-paying people on their account can spend $8/month on top of their existing membership. Netflix offers a profile-transfer feature that carries over personalized content like lists and recommendations for those who decide to get their own account.
Reasons for Crackdown
Reportedly, 100 million Netflix accounts globally share passwords. Therefore, it makes sense for Netflix to crack down on password-sharing to increase revenue. Netflix co-CEO Greg Peters mentioned during an earnings briefing that some people using a shared account are watching as much as the main account owner and have a very strong likelihood of converting to a paid account. Now it seems that is exactly what is happening.
DVD-by-Mail Service Closure
In other Netflix news, the company is finally closing its DVD-by-mail service at the end of September 2023.
Pricing
Netflix memberships in the US start at $7/month for a plan with ads, $10/month for the Basic plan with no ads, $15.50/month for the Standard plan, and $20/month for the Premium plan.
Conclusion
Netflix’s crackdown on password-sharing has resulted in increased sign-ups. The policy requires people who do not live in the same house as the account owner to sign up for their own account or leave. While there was an increase in membership cancellations, this was not enough to offset the overall increase in new membership sign-ups. Netflix will provide further insight and data about the crackdown in its first earnings report since the policy was implemented. For those who decide to get their own account, Netflix offers a profile-transfer feature that carries over personalized content.
FAQs
Why did Netflix Crack Down on Password-Sharing?
Reportedly, 100 million Netflix accounts globally share passwords. Therefore, it makes sense for Netflix to crack down on password-sharing to increase revenue. Netflix co-CEO Greg Peters mentioned during an earnings briefing that some people using a shared account are watching as much as the main account owner and have a very strong likelihood of converting to a paid account.
What Happens to People Who Benefit from Password-Sharing?
People who benefit from password-sharing must either sign up for their own account or move on, according to the new policy. Account owners can spend $8/month on top of their existing membership to keep non-paying people on their account. For those who decide to get their own account, Netflix offers a profile-transfer feature that carries over personalized content like lists and recommendations.
What are the Netflix Membership Prices?
Netflix memberships in the US start at $7/month for a plan with ads, $10/month for the Basic plan with no ads, $15.50/month for the Standard plan, and $20/month for the Premium plan.
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