Netflix flags password sharing as root cause behind subscriber drop

The Netflix Inc. application home screen on a smartphone arranged in the Brooklyn Borough of New York, U.S., on Saturday, Oct. 16, 2021. Photographer: Gabby Jones/Bloomberg

Netflix recently said it lost 200,000 subscribers during the first quarter of 2022, the first time the streaming service witnessed a subscriber drop since 2011, causing the stock to tank. The company cited password sharing as the main reason for the drop in paid subscribers.

The streaming service has pledged to go after subscribers who are sharing passwords. Netflix claims that around 100 million households globally share passwords. It has 222 million “paying households”, 30 million of which are based in the US and Canada.

Further projections show that Netflix will lose 2 million paid subscribers in the second quarter of 2022 but will bounce back in the second half of the year. It is currently the most expensive streaming service in India, with the company’s HD plan starting from Rs 649 a month. By comparison, Disney+ Hotstar and Amazon Prime Video are available for Rs 1,499 per year for their top tier plans.

Last month, Netflix announced that it was testing steps to end password sharing between households. The announcement was made when the firm raised prices of the service in Chile, Costa Rica, and Peru. Last year, Netflix experimented with an account verification tool to keep unauthorised users from using others’ accounts.