Netflix Inc. has witnessed a significant decline in its user base in Spain during the first quarter of 2023, with over one million users lost, according to market research group Kantar. This decline raises concerns about the potential negative impact of the streaming giant’s recent efforts to address password-sharing.
In a bid to tackle the prevalent practice of password sharing, Netflix implemented a monthly fee of €5.99 ($6.57) for Spanish users who shared their login information with other households. Additionally, the company deployed technical measures to identify and discourage such sharing. Kantar’s research reveals that this initiative resulted in a loss of over one million users, with approximately two-thirds of them being individuals who availed themselves of someone else’s password. Kantar’s findings are based on surveys conducted to gauge household streaming habits. Netflix relies on various methods, such as monitoring IP addresses, device identifications, and account activity, to detect instances of password sharing and determine whether a customer is accessing the service from their primary residence.
Although Netflix experienced a setback in terms of new subscriber growth in the first quarter, the company remains optimistic about future prospects. Netflix anticipates that its password enforcement measures, along with the introduction of a more affordable streaming option featuring advertisements, will drive growth in the latter half of 2023.
Netflix’s investment in Spanish language content has yielded positive results. Kantar’s research indicates that two out of the five most popular series in Spain during the first quarter of 2023 were available for streaming on Netflix. The company has made significant strides in expanding its presence in the Spanish market, exemplified by the establishment of its first European production hub in Madrid back in 2019. This facility has witnessed substantial growth, doubling in size by the close of last year, demonstrating Netflix’s commitment to catering to Spanish viewers.
As Netflix grapples with the repercussions of its password-sharing crackdown, it must strike a delicate balance between deterring unauthorized account usage and ensuring a user-friendly experience. The response of the Spanish market to the company’s measures serves as a valuable lesson, guiding Netflix as it navigates the intricacies of streaming subscriptions and user engagement.
