Netflix password-sharing crackdown works, US subscriber numbers rise

Netflix in May began cracking down on password sharing in the US, and the decision has worked in the company’s favor, according to subscriber data shared today by analytics firm Antenna (via The Wall Street Journal).

Shortly after putting an end to password sharing for several US households, average daily signups to Netflix reached 73,000 per day, a 102 percent increase from the previous 60-day average. Netflix saw close to 100,000 daily sign-ups on both May 26 and 27, beating sign-ups even during covid lockdowns.

Netflix saw an increase in subscription cancellations after the policy change, but the number of people canceling did not beat the number of new signups the company received. Antenna says the ratio of registrations to cancellations since May 23 is up 25.6 percent compared to the previous 60-day period.

According to Netflix, more than 100 million households shared accounts, affecting their ability to “invest in and improve Netflix” for paying members. The company said it expected some cancellation reactions in the US, but based on previous rollouts in other countries, the policy change will result in acceleration in revenue growth and membership base.

Netflix no longer allows subscribers to share passwords with people who don’t live in the same location. Netflix users must establish a primary location, and subscribers who live elsewhere cannot use the account. There are quotas for travel or vacation homes, but Netflix now uses IP address and other information to limit usage by multiple households.

Netflix users can pay an additional $7.99 per month to allow one additional member to use a Standard or Premium Netflix account outside of the main location, and up to two additional people can be added (Premium subscriptions only).

The additional fee provides each person with a profile, personal recommendations, login and password. Alternatively, there is a profile transfer process that allows those who previously used Netflix for free to create their own paid accounts.

Netflix is ​​priced from $6.99 per month for the plan with ads. A basic plan with no ads, access on one device at a time and 720p HD streaming is priced at $9.99 per month. The standard plan with 1080p streaming and access on two devices at the same time is priced at $15.49 per month, and the 4K Netflix plan with support for viewing on four devices at a time is priced at $19.99 per month.

Note that while the Standard and Premium plans allow viewing on two to four devices at a time, Netflix’s new policy is that all of these devices must be in the same location in the household.