- Netflix credits its anti-password sharing efforts for a subscribers jump after prior declines
- The goal is pushing moochers to paid plans, especially the new ad-supported tier
- But enforcement is challenging and risks alienating legit shared account users
- Timing and execution must be balanced to avoid churn in pursuit of profitability
Netflix’s paid subscribers surged by 6 million last quarter, up from just 1.5 million in Q1 2022. The streaming giant credits this revival primarily to measures blocking password sharing beyond households.
Cracking Down on Password Sharing to Boost Paid Users
By detecting IP and usage pattern mismatches, Netflix has booted many non-paying shared account users. The aim is pushing these “moochers” to sign up for paid plans. Ideally for Netflix, the cheapest ad-supported option.
Already nearly a quarter of June and July sign-ups chose the ad tier, up from 19% in June. Rival Disney also plans anti-password sharing efforts to maximize paid customers.
Challenges in Sharing Crackdowns
But enforcement has challenges. Shared profiles across households are harder to identify than different IPs. And false positives risk angering legit shared account users.
There’s balance in timing as well. Newer services may allow sharing to drive trial. But at scale, paid conversion becomes critical. When done right, anti-sharing efforts boost subscribers. Done wrong, they risk churn and bad PR.
Netflix Global Paid Subscribers Growth (in millions)
2018 – 139
2019 – 167
2020 – 204
2021 – 221
2022 – 223
A User’s Perspective on Streaming Anti-Sharing Efforts
As a Netflix subscriber, I previously shared my account with two other households. Once Netflix enabled anti-sharing measures in Latvia in August 2023, I downgraded my plan to fewer screens.
The other households didn’t subscribe, as they were more occasional viewers. For a smaller market like the Baltics, an alternative to restricting sharing could be upselling sports packages or added channels based on user profiles.
Opportunities for Local Streaming Platforms
For a Baltic streaming provider like Go3, advertising should be a priority over limiting password sharing. Pre-roll, mid-roll, and dynamic ad insertion in linear TV can drive higher revenues.
Additionally, catering to older audiences through an intuitive interface could expand subscriber potential. Over 18% [World Bank data, 2021] of Baltics residents are over 65, representing an underserved market.
Rather than alienating light sharers, local platforms can build audiences through ads and customer-focused features. As Netflix shows, cracking down on sharing requires careful timing and execution.