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- Streaming service and production company has seen sharp decline in subscriptions
LONDON: Netflix has confirmed its intention to crack down on households sharing passwords as it attempts to sign up new members following a slump in subscribers.
The streaming service and production company saw a sharp decline in subscriptions over the first three months of the year, with a record fall of 200,000 users.
In a letter to subscribers, the firm said that an estimated 100 million people were watching Netflix using other people’s accounts, which was holding back its growth.
“Account sharing as a percentage of our paying membership hasn’t changed much over the years, but coupled with the first factor, means it’s harder to grow membership in many markets — an issue that was obscured by our COVID growth,” the platform said in a statement.
Netflix warned shareholders that another 2 million subscribers were likely to leave in the three months to July. “Our revenue growth has slowed considerably,” it added.
With 222 million paying customers, there are half as many people watching Netflix without paying.
Reed Hastings, chief executive officer of Netflix, said. “We’re working on how to monetize sharing. You know, we’ve been thinking about that for a couple of years. But you know, when we were growing fast, it wasn’t the high priority to work on. And now we’re working super hard on it.
“Remember, these are over 100 million households that already are choosing to view Netflix. They love the service. We’ve just got to get paid to some degree for them.”
Such a crackdown is already happening in some countries, including Chile, Costa Rica, and Peru, where users are encouraged to pay for extra accounts offered at reduced prices.
Some social media users were unhappy with Netflix’s announcement, claiming that the reason for the decline in subscribers was not due to password sharing but down to the low quality of content and increased prices.