Netflix has been working on ending password sharing for some time now. The platform is already limiting sharing passwords in four countries: Canada, New Zealand, Portugal and Spain. It said that the crackdown will expand to more countries later, however, the move has caused an immediate user plunge, according to a new report.
Market research group Kantar reported that Netflix saw a loss of over 1 million users of the service in Spain in Q1 of 2023. It said that while the streaming service hopes that in time, many of these users will return to the service under a paid subscription model, “but the current trend shows that this is far from guaranteed.”
“Interestingly, there is no strong demographic skew to those who cancelled, signalling a more outright rejection of the password sharing clampdown. In a worrying sign for the next quarter, 10% of remaining Netflix subscribers say they plan to cancel their plan in Q2 2023, which is well above the average seen in previous quarters,” the report said.
Netflix anticipated ‘cancel reaction’
In its first quarter earnings, released on April 18, Netflix said that it sees “a cancel reaction in each market when we announce the news.” The company is expecting the dip in subscriber count “to be momentary before users that didn’t pay start signing up for their own accounts.”
“In Canada, which we believe is a reliable predictor for the US, our paid membership base is now larger than prior to the launch of paid sharing and revenue growth has accelerated and is now growing faster than in the US,” Netflix said.
According to Netflix, there are more than 100 million people who use an account they don’t pay for.
According to Dominic Sunnebo, global insight director at Kantar’s Worldpanel Division, “Some users were expected to be lost in the process but losing over 1 million users in a little over a month has major implications for Netflix and whether it decides to continue with its crackdown globally.
He said that it remains to be seen how many of these consumers decide to re-subscribe as it “will be vital to Netflix strategy in this space.”
Market research group Kantar reported that Netflix saw a loss of over 1 million users of the service in Spain in Q1 of 2023. It said that while the streaming service hopes that in time, many of these users will return to the service under a paid subscription model, “but the current trend shows that this is far from guaranteed.”
“Interestingly, there is no strong demographic skew to those who cancelled, signalling a more outright rejection of the password sharing clampdown. In a worrying sign for the next quarter, 10% of remaining Netflix subscribers say they plan to cancel their plan in Q2 2023, which is well above the average seen in previous quarters,” the report said.
Netflix anticipated ‘cancel reaction’
In its first quarter earnings, released on April 18, Netflix said that it sees “a cancel reaction in each market when we announce the news.” The company is expecting the dip in subscriber count “to be momentary before users that didn’t pay start signing up for their own accounts.”
“In Canada, which we believe is a reliable predictor for the US, our paid membership base is now larger than prior to the launch of paid sharing and revenue growth has accelerated and is now growing faster than in the US,” Netflix said.
According to Netflix, there are more than 100 million people who use an account they don’t pay for.
According to Dominic Sunnebo, global insight director at Kantar’s Worldpanel Division, “Some users were expected to be lost in the process but losing over 1 million users in a little over a month has major implications for Netflix and whether it decides to continue with its crackdown globally.
He said that it remains to be seen how many of these consumers decide to re-subscribe as it “will be vital to Netflix strategy in this space.”
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