Netflix lost one million subscribers in the first three months of 2023 after expanding its policy of eradicating shared accounts to Spain.
This figure was found by the firm Kantar (published in. Bloomberg) and shows how this crackdown on one of the most common user behaviors can cause a major setback for the company’s bottom line.
Netflix on the decline
Early February, Netflix introduced a monthly fee of €5.99 ($6.57) for users on Spain to share their login data with another household, in addition to implementing technical measures to detect such sharing.
According to the study, this measure caused the drop in users of more than one million, two-thirds of whom were using someone else’s password.
“It’s clear that this sharp drop is due to the crackdown,” said Dominic Sunnebo, global chief information officer of Kantar’s Worldpanel Division, adding that the loss of one million users, even if most were not paid subscribers, would be a major blow to Netflix in terms of word-of-mouth recommendation for their shows and services.
Of all the remaining subscribers to Netflix at SpainIn the second quarter, a tenth said they planned to unsubscribe.
They expected it, but how much?
Peru, Chile and Costa Rica were the first countries to implement these new rules. By February, Spain, Portugal, Canada and New Zealand would follow.
Worldwide, more than 100 million people use an account that they do not pay for, according to Netflix. The company does not break down this figure by country.
The company notes that it detects password sharing by monitoring IP addresses, device IDs, and account activity to determine whether a customer logged in from their primary residence.
Netflix missed expectations for new subscribers in the first quarter, but the company said the password control plan and a cheaper streaming version with ads will accelerate growth in the second half of 2023.