Netflix’s Password-Sharing Crackdown Has Reportedly Been Very Successful In Adding New Subscribers

The recent crackdown by Netflix on password-sharing might not be the most popular move, but it’s turning out to be a success story. This initiative, which began on May 23 by charging additional fees for users outside the household, has generated surprising outcomes.

Antenna, a firm specializing in measuring Netflix’s subscriber trends through opt-in panels tracking transaction data, has recently released data that underscores the effectiveness of this crackdown.

The immediate aftermath of the enforcement saw Netflix registering an unprecedented surge in new users during the initial six days. Antenna’s data reveals that these days marked the most significant spikes in US user acquisition that the firm had observed in the four and a half years of tracking. This momentum hasn’t dwindled; subsequent data releases continue to affirm the sustained success of the initiative.

Antenna’s graphical representation displays the sharp uptick in sign-ups contributing to Netflix’s impressive Q2 performance. During this period, Netflix managed to add a whopping 5.9 million subscriptions globally. While the crackdown triggered some cancellations, its impact on new subscriptions outweighed any negative repercussions.

Graphic courtesy: Antenna

July’s figures maintained this trajectory, albeit at a slightly moderated pace, as expected following the initial surge. The month recorded 2.6 million gross additions for Netflix, a noteworthy number even though it marked a 25.7% dip from the record-breaking numbers of June. Remarkably, for two consecutive months, Netflix took the lead in the category, accounting for nearly one in five subscription-video-on-demand gross additions.

The long-term implications of this crackdown are also substantial. Analysts predict that over time, around 33 million households worldwide, previously sharing passwords, could transform into paying subscribers by the end of 2025. According to JPMorgan analyst Doug Anmuth, this projection assumes an equitable split between new subscribers and additional users added to existing accounts.

The influence of Netflix’s success hasn’t gone unnoticed by its competitors. Disney’s CEO, Bob Iger, recently disclosed plans to implement a similar password-sharing crackdown in 2024, inspired by Netflix’s achievements.

Notably, Antenna’s research also sheds light on the enthusiasm surrounding Netflix’s more affordable ad-supported tier, priced at $7 monthly. An increasing number of new subscribers, around 23%, are opting for this plan. This trend represents a 4-point increase from June 2023, reaching the highest proportion of sign-ups since the plan’s introduction in November.

Netflix’s dual strategies of introducing an ad-supported tier and cracking down on password-sharing have yielded substantial benefits for the streaming giant. While users might have initially frowned upon the crackdown, it seems that both Netflix and its subscribers are reaping the rewards in a significant manner.

Leave a Reply

Your email address will not be published. Required fields are marked *