- Netflix’s password-sharing crackdown has had a solid start in the US, according to new data.
- JPMorgan expects 33 million households that share passwords to convert to paying subscribers by the end of 2025.
Netflix on May 23 began charging US subscribers $8 to add another user to their account, if that person lives outside the account holder’s household. The change was meant to stop the proverbial ex-boyfriend’s cousin’s friend from continuing to watch someone’s Netflix account.
In the first six days after the clampdown went into effect, Netflix had “the four single largest days of US user acquisition” in the four and a half years that analytics company Antenna has tracked it. Antenna measures data through a slew of of opt-in panels that track purchase and transaction data.
Antenna said average sign-ups to Netflix reached 73,000 during that period, a 102% increase from the prior 60-day average. Cancellations also increased, though not as much as sign-ups, Antenna said, adding that the ratio of sign-ups to cancellations was up 25.6% versus the prior 60-day period.
Antenna noted that the spikes in sign-ups during the first days of the crackdown were higher than the those seen during the pandemic lockdowns in March and April 2020.
There has been some backlash to the crackdown from upset consumers, with the “CancelNetflix” hashtag picking up steam on Twitter.
But this Antenna data suggests the negative effects may not be as dire as predicted by some. A recent survey from analysts at Jefferies found that 62% of password borrowers said they would stop using Netflix rather than get their own account.
But consumers are notoriously prone to overstate their willingness to cancel services in surveys. So it should not come as a surprise if far more that 48% actually do come back into the Netflix fold after getting the boot.
“We expect some cancel reaction in each market when we roll out paid sharing, which impacts near term member growth,” Netflix said in its Q4 earnings, reported in January. “But as borrower households begin to activate their own standalone accounts and extra member accounts are added, we expect to see improved overall revenue, which is our goal with all plan and pricing changes.”
JPMorgan analyst Doug Anmuth expects 33 million households globally that share passwords will convert into paying subscribers by the end of 2025, with a roughly equal split between new subscribers and extra members (in which an account holder pays more money to add a member outside their household).