Business Hour

Netflix Delays Launch of ‘Paid Sharing’ Feature Amidst Global Crackdown on Password Sharing

Netflix, the globally acclaimed streaming platform, holds the distinction of being the most widely streamed app across the globe. In recent times, Netflix has undertaken measures to address the issue of password sharing among its users, initially focusing on U.S. subscribers and subsequently extending these efforts to international markets. Initially, the company had intended to introduce a “paid sharing” feature for U.S. users during the first quarter of this year. However, due to the unforeseen cancellations in markets where these changes had already been implemented, Netflix was compelled to delay the launch until the summer season.

According to the new regulations, Netflix users in the United States will have to either delete people from their accounts or pay $7.99/month for an additional membership for those who are not in their primary home. Similar reforms will be implemented in dozens of other markets in the upcoming weeks and months. The company provides tools to help current users with this transition. These include facilities to reset their password, see which devices are logged into their accounts, and remove those that shouldn’t. In addition, for people who share a Netflix account with someone else, a “Transfer Profile” option will allow them to move their existing account data, such as their watch list and viewing history, to their new account.

Netflix has introduced this policy in 103 counties, such as the UK, Spain, Latin America, Canada, etc. However, Netflix is receiving a lot of backlash from the subscribers and the users who were using Netflix through sharing passwords. For example, according to market research group Kantar, Netflix lost more than one million users in Spain in the first three months of 2023, a sign that the streaming giant’s crackdown on password-sharing could face pushback. Similarly, in Canada, Netflix faced a downfall in subscribers and users. But later, in both countries, people again started subscribing to Netflix, and even the subscribers count was much more than before.

After launching the feature last quarter in four countries, including Canada, New Zealand, Spain, and Portugal, Netflix’s crackdown on password sharing seems to work. As a result, the company’s revenue in Q1 2023 increased marginally (3.7 percent) to $8.16 billion from $7.87 billion. The streaming giant also expects growth in Q2 2023. Netflix has clarified earlier that the crackdown on passwords will extend to Indian users also, though the streaming giant may consider delaying the launch as the company is slowly adding users. In the report, Netflix suggests that India is an important market, and the company has adjusted the prices of its subscriptions to boost growth.

If the Netflix password crackdown is implemented in India in the future, there is a possibility that users may switch to alternative streaming platforms. Amazon, a major competitor to Netflix in the Indian market, has already expressed its stance on Netflix’s new policy through a tweet. Notably, Netflix itself shared a tweet back in 2017 that promoted password sharing with the caption, “Love is sharing a password.”

Taking a clever approach, Prime Video, Amazon’s streaming service, responded to this by tweeting a screenshot of their homepage where multiple people were sharing a single account. Instead of displaying individual names below each account, Prime Video creatively replaced them with words that formed a sentence when joined together, reading, “Everyone who has our password,” followed by a heart emoticon. This demonstrates Amazon’s proactive efforts to position itself as an alternative to Netflix.

Consequently, if Netflix’s password crackdown is implemented in India, users might become less inclined to favor Netflix and could start gravitating towards Amazon Prime Video or other competing streaming platforms.



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