Netflix sign-ups double after crackdown on account sharing
Under new rules, sharing account login from anyone not at same address requires paying extra $7.99 a month
Netflix’s crackdown on password sharing in the United States has paid off with a major spike in new subscriptions.
According to an analysis released Friday by the television analytics company Antenna, the streaming giant posted four of its best days of U.S. acquisition ever with nearly 100,000 daily sign-ups on May 26 and May 27, a few days after it started to curb password sharing. It netted 73,000 new daily sign-ups on average after the crackdown, marking a 102 percent increase over the prior 60-day average. The ratio of sign-ups to cancels also increased, Antenna found, indicating that new subscriptions outpaced cancellations.
The password-sharing crackdown began May 23, when Netflix started sending emails to members who were known to be sharing accounts outside their household.
“A Netflix account is for use by one household,” according to the email update from the company. “Everyone living in that household can use Netflix wherever they are — at home, on the go, on holiday — and take advantage of new features like Transfer Profile and Manage Access and Devices.”
Under the company’s new rules, anyone sharing their Netflix account login with family members or friends who don’t live at the same address must pay an extra $7.99 a month for each additional person. People borrowing the accounts have been redirected to a page showing how to start their own account.
Netflix executives can breathe a sigh of relief with the new U.S. subscription numbers, as the new password-sharing policy carried substantial risk. Some angry users took to social media and threatened to switch to a different streaming platform such as Disney+ or Max (formerly HBO Max).
“This is an important transition for us,” Netflix co-CEO Gregory Peters said in the company’s recent earnings call. “So we’re working hard to make sure that we do it well and as thoughtfully as we can.”
The company has foreshadowed the move with warnings and testing for the past two years, implementing the policy abroad for the past year.
The crackdown may have come with less risk than the social media backlash suggested, Wedbush analyst Alicia Reese said.
“The people who were the most vocal were the piggybackers, so they weren’t paying for Netflix anyway,” Reese said. “Parents who may have to now pay for their college students, they’re likely willing to pay that incremental amount more.”
The company’s shares rose 2.6% Friday.