Until recently, the streaming platform Netflix allowed users of different families to create profiles on other people’s accounts. However, in the last year there had been talk of a change by the company, in the sharing of accounts; the streamer immediately experimented with this new method in the United States and, during the month of May, it was also implemented in Europe. The system restricts devices connected to a given account to one household, preventing password sharing across multiple physical locations by monitoring WiFi and IP addresses.
According to Variety, the decision has so far been a godsend for the streaming service
Netflix just recorded the four largest days of signups since these numbers were first tracked publicly in January 2019. During that time (May 25-28), the average daily signups rocketed to 73,000, more than the twice as much as any single day in the previous two months.
From a financial standpoint, it makes sense that the company has decided to curb password sharing. In Q2 2022, the platform’s first subscriber drop in many years saw the company lose 1 million users. This has left the company struggling to continue competing with other streaming services, meanwhile redirecting its production budget away from expensive feature films like Red Notice e Bright.
As a result of this decision, there are still some password sharing options that users can use. For example, it is possible to add new users outside the household, in limited numbers depending on the payment level of the original profile. However, the sharing brake has naturally been controversial. Previous reports from the company have shown that over 100 million households were using password sharing, meaning this new rule affects a large swath of people around the world.
Eliminating a service that has been central to the brand for many years may have been beneficial in the short term, but how it will affect bottom line over time remains to be seen. The imposition on external users to pay for themselves has probably already caused many to decide that the platform’s content was not attractive enough on its own to entice them to sign up as a new family.
This new rule also reduces Netflix’s attractiveness as a competitor to other streaming services that still offer password sharing, which could be harmful in the long run.