Netflix is rolling out a password-sharing crackdown for consumers in India and all other markets starting today, the global streaming giant said after a limited implementation of restrictions that helped the firm sign up nearly 6 million subscribers in the quarter ended June.
The streaming giant said it will begin addressing account sharing between families in nearly all of the remaining countries starting Thursday. Netflix, which once supported the practice of sharing account passwords, is now posing complex challenges to its business prospects.
It began testing the restriction last year, much to the chagrin of many subscribers, and expanded to several other countries including Canada, New Zealand, Portugal, Spain and the US in 2023. In some of the aforementioned markets, Netflix allowed those who were sharing the password to pay extra to serve their friends.
The firm has clarified that it will not be introducing an additional membership option for customers in countries where it has recently enforced account sharing restrictions. The reason behind this decision is the relatively low market penetration in these markets, as well as the availability of more economical Netflix subscription series, the company wrote in a letter to shareholders.
“In these markets, we are not offering an additional member option as we have recently cut prices in a number of these countries (for example, Indonesia, Croatia, Kenya and India) and penetration is still relatively low in many of them so we have plenty of runway without creating additional complexity. Families borrowing Netflix will be able to transfer existing profiles to new and existing accounts.”
Netflix’s password-sharing crackdown helped deliver strong subscriber growth in the quarter ending in June, the company said Wednesday. After a loss of nearly 1 million customers in the same quarter last year, the company said it has now gained 5.9 million subscribers. This increase is due to individuals who could no longer share the service without cost, choosing to pay out of their own account.
Netflix CEO Spence Neumann said the growth in the firm’s revenue is “mainly due to our paid sharing implementation”. He added: “It’s our main revenue accelerator in the year, and we expect that impact … to increase over several quarters.”
The ongoing effort against some passwords could further challenge Netflix’s competitive edge in various markets. Take India, for example, where Netflix faces stiff competition from JioCinema, a platform backed by James Murdoch and Mukesh Ambani. JioCinema not only streams many popular shows and movies from NBC, HBO, and Warner Bros., but also hosts some of the most popular sporting events in the region. An annual JioCinema subscription costs around $12.