Netflix is bringing password-sharing crackdown to consumers in India and every other market starting today, the global streaming giant said after a limited rollout of the restriction helped the firm sign up nearly 6 million subscribers in the quarter ending June.
The streaming giant said it will start to address account
sharing between households in almost all of its remaining countries starting
Thursday. Netflix, which once supported the practice of account
password-sharing, now finds it posing complex challenges to its business
prospects.
It began testing the restriction last year, much to many
subscribers’ chagrin, and expanded it to a number of other countries including
Canada, New Zealand, Portugal, Spain and the U.S. in 2023. In some
aforementioned markets, Netflix allowed those sharing the password to pay extra
to accommodate their friends.
The firm has clarified that it won’t be introducing an
additional membership option for customers in countries where it’s newly
enforcing account sharing restrictions. The reason behind this decision is the
relatively low market penetration in these markets, along with the availability
of more economical Netflix subscription tiers, the company wrote in a letter to
shareholders.
“In these markets, we’re not offering an extra member option
given that we’ve recently cut prices in a good 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. Households borrowing Netflix will be able to transfer
existing profiles to new and existing accounts.”
Netflix’s password-sharing crackdown helped deliver a robust
subscriber growth in the quarter ending June, the company said on Wednesday.
Following a loss of nearly 1 million customers in the same quarter last year,
the company said it now gained 5.9 million subscribers. This increase is
largely due to individuals who, no longer able to share the service at no cost,
have chosen to pay for their own accounts.
Netflix CFO Spence Neumann said that the revenue growth for
the firm is “largely driven by our paid sharing rollout.” He added: “It is our
primary revenue accelerator in the year, and we expect that impact … to build
over several quarters.”
The ongoing effort against password-sharing could
potentially 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
numerous popular shows and movies from NBC, HBO, and Warner Bros., but it also
hosts some of the region’s most sought-after sporting events. JioCinema’s
annual subscription costs about $12.
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