Netflix blames 100 million password sharers for stalled subscriber growth

Netflix announced this in March plans to take action against the disclosure of passwordsand in its earnings letter to shareholders for the first quarter (pdf), there was a big clue as to why.

First, it is becoming increasingly clear that the pace of growth in our underlying addressable market (broadband households) depends in part on factors that we do not directly control, such as the adoption of on-demand entertainment and data costs. We believe these factors will continue to improve over time, making all broadband homes potential Netflix customers. Second, we estimate that in addition to our 222 million paying households, Netflix is ​​shared with over 100 million other households, including over 30 million in the UCAN region. Account sharing as a percentage of our paying membership hasn’t changed much over the years, but coupled with the first factor, it means many markets are finding it harder to grow membership – an issue that’s been masked by our COVID growth became.

Netflix has 222 million “paying households,” but it’s estimated that the service is shared with over 100 million “extra households,” 30 million of which live in the US and Canada. That suggests there’s a huge crowd of people who don’t pay Netflix directly to stream their favorite shows.

The company is currently testing a new function in Chile, Costa Rica, and Peru, where subscribers can add “sub-accounts” for up to two people away from home at discounted rates. It’s unclear when the test might expand to more countries, but given how many people who watch Netflix might but don’t pay, it seems likely Netflix might want to roll it out more broadly sooner or later.

Netflix also announced on Tuesday that it was losing subscribers for the first time in a decade last quarter. Netflix blames 100 million password sharers for stalled subscriber growth

Fry Electronics Team

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