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Is Netflix going to ban password sharing? Details on potential crackdown

Are the days of splitting the cost over?

Published: Wednesday, 20th April 2022 at 1:19 pm

It appears that change is afoot at Netflix.

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As Netflix spoke to its shareholders on Tuesday 19th April 2022 about its performance in the first quarter, a spokesperson said: "Our revenue growth has slowed considerably. Our relatively high household penetration - when including the large number of households sharing accounts - combined with competition, is creating revenue growth headwinds."

It noted it had been hit by the price rises in multiple regions and two million subscribers were expected to leave the platform ahead of July.

It was revealed that an estimated 100 million households had broken the service's rules by sharing passwords.

Boss Reed Hastings is reported by the BBC to have noted on Tuesday: "When we were growing fast, it wasn't a high priority to work on [account sharing]. And now we're working super hard on it."

So, in light of these comments, we have to ask, is Netflix going to stop password sharing?

Is Netflix going to ban password sharing?

netflix profiles

From the comments by Netflix boss Reed Hastings, it would appear that the streaming service intends to crack down on password sharing.

There could be additional limits on the number of accounts used at one time, two-factor authentication to slow down the number of people using the service, or potentially additional charges for additional users on accounts.

In March 2022, the streaming service announced it would look to get customers to pay to share their accounts outside of their households.

Netflix announced: "We’ve always made it easy for people who live together to share their Netflix account, with features like separate profiles and multiple streams in our Standard and Premium plans. While these have been hugely popular, they have also created some confusion about when and how Netflix can be shared. As a result, accounts are being shared between households - impacting our ability to invest in great new TV and films for our members."

They added: "We recognize that people have many entertainment choices, so we want to ensure any new features are flexible and useful for members, whose subscriptions fund all our great TV and films."

The service has begun trialling additional features for adding extra members to accounts and transferring profiles to new accounts. These are being tested in Chile, Costa Rica, and Peru.

However, nothing has been announced as of yet for an international rollout, and it comes at a time for the streaming giant where they are seeing a drop-off in subscribers - with more predicted for the second quarter of 2022.

Why is Netflix losing subscribers?

Since the announcement of losing 200,000 subscribers in the first quarter of the year, shares in Netflix have plunged by more than 25% in extended trading with a predicted loss of $40 billion on the stock market, according to ITV News.

The cost of living crisis in the UK and in other countries is likely seeing a drop-off in subscribers, with market research firm Kantar reporting that households in the UK had cancelled 1.51 million streaming subscriptions in the first quarter of 2022.

Kantar notes: "With many streaming services having witnessed significant revenue growth during the height of Covid, this moment will be sobering. The evidence from these findings suggests that British households are now proactively looking for ways to save, and the SVoD market is already seeing the effects of this.

Additionally, Vladimir Putin's invasion of Ukraine saw the streaming service lose 700,000 subscribers after it pulled out of Russia.

Finally, the increase in Netflix's own prices is also estimated to have led to a drop-off in subscribers.

If these challenges were not enough, Netflix also faces competition from incredibly wealthy rivals in the form of Prime Video, HBO Max, Apple TV+ and Disney+.

Looking for something else to watch? Check out our guides to the best series on Netflix and the best movies on Netflix

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