Netflix recently clamped down on password sharing and this has been met with considerable backlash from the subscribers who have been sharing their accounts with users outside their household.
Netflix’s stance on password sharing has changed from making it one of its selling points years ago to culminating in the current policy of charging for additional users beyond a primary household. This move has sparked outrage among users, some of whom have been subscribers for over 20 years, leading to the cancellation of their accounts. Critics argue that the crackdown is “anti-family” and that it complicates access to the streaming service, undermining its value.
Complaints about the platform aren’t limited to its password-sharing policy. Most have expressed frustration with abrupt cancelations of original shows and an overall lack of updated content.
To further complicate matters, Netflix is one of the most expensive streaming services at the moment, raising questions about the value it offers compared to its competition.
Netflix’s new policy may have severe repercussions on its user base. Although Netflix co-CEO Greg Peters acknowledged the expected “cancel reaction” in response to the policy change, we doubt it will be okay to lose so many subscribers with no new ones coming.
If it’s any consolation, password-sharing, colloquially known as “mooching” isn’t a Netflix-exclusive issue. A chunk of Netflix and Disney+ users are “moochers”, a situation costing the industry around $2.3 billion annually, according to CordCutting’s survey. It’s clearly a problem when other streaming platforms, like Max and Paramount+, are looking to address this. It probably won’t take long for Prime Video, Disney+, and even Apple TV+ to take similar measures.
Netflix is probably thinking that its decision to prevent password sharing could potentially push its users to its new $6.99 a-month ad-supported plan, although this tier doesn’t carry all of Netflix’s content.
In the same survey, CordCutting asked the subscribers what they plan to do once Netflix starts cracking down on password sharing. 23% of the respondents claimed they’ll cancel their subscription, which could see Netflix lose 15.26 million users, give or take. But, of course, surveys and the real world are a different story. Until we hear more about Netflix’s numbers at the next earnings call, we won’t know its impact.
If there’s any reversal in its implementation, Netflix’s bottom line has likely taken a hit.
In the meantime, some tech-savvy users have found a way around the new restrictions, using certain software to cloak their devices and make them appear as part of their home network.
The best-case scenario here is for Netflix and the subscribers to meet halfway. In particular, subscribers need to realize that the more Netflix loses users and revenue, the less likely it will experiment with shows, resulting in fewer original shows and films. Keep in mind that even the biggest Netflix shows have already been affected by the dwindling user base. If this keeps up, Netflix won’t be able to produce shows like Stranger Things, Wednesday, and You.
To make matters worse, situations like the ongoing WGA writers’ strike could result in the cancellation of additional shows.
Ultimately, Netflix’s password-sharing crackdown has far-reaching implications for its subscriber base and revenue stream. It remains to be seen if this will have a positive or negative effect in the long run.
For now, the consensus is that its hard-line stance could prove costly. The only question now is, until when is the streaming giant going to maintain its position?
