Netflix Password Crackdown Is Having An Unbelievable Effect On Customers
Netflix reports a significant increase in new subscribers amid password sharing crackdowns.
The Netflix password crackdown seems to be working in the company’s favor — at least for now. Variety reported on research from Antenna that Netflix’s average daily sign-ups reached 73,000 from May 25-28, which is a 102 percent increase from the previous 60-day average. Surprisingly, this spike even outpaced the spikes of sign-ups that happened during the early days of the COVID-19 lockdowns in March and April 2020.
In May, Netflix announced that users sharing passwords with people outside their household would need to be added as extra members or get their own subscription to the streaming service. While the announcement was met with plenty of pushback on social media, and many people threatened to move to piracy instead. While there have probably been people who have dropped the service in response to the crackdown, it seems more people are caving and just setting up their own accounts.
Between May 25 and 28, Netflix also saw an uptick in cancellations in the wake of the password crackdown, but the Antenna data indicates that the number of new subscribers outweighed the cancellations. For the “extra member” account, subscribers would have to add $7.99 per household to their billing cycle, which is $1 more than the standard tier that comes with ads. The next ad-free tier is the Basic package, which is $9.99 per month, so the extra member cost is less for subscribers overall.
The Netflix password crackdown isn’t the only thing that riled up subscribers, as users were also upset when the streaming giant announced its ad tier. However, that lower-priced tier also seems to be paying off for the company, as Netflix said the ad tier has brought in nearly 5 million subs in the first six months of its launch. In short, it seems like the streaming company’s shifts are paying off, despite the customer dissatisfaction it’s causing.
Of course, Netflix hasn’t had its password crackdown in place for very long, so these numbers could very well change. This could especially be the case as the streaming giant sees some of its most significant original content draws delayed. Stranger Things, which gave the streamer a massive bump in subscribers when it released its fourth season, was delayed in the wake of the Writers’ Guild of America strike, and there’s no clear release date for the final season in sight.
Netflix will likely need to continue to draw in subscribers with its original content offerings as the password crackdown continues to upset long-term users. While licensed content is certainly a draw for customers, there are plenty of other streaming services with competitive amounts of licensed content. The steady stream of original content that the streamer produces is one of the main reasons subscribers stay.
Of course, as mentioned, there is also the piracy route that some users have taken. It would be interesting to see the piracy statistics on some of Netflix’s biggest original shows and movies following the password crackdown. For now, it remains to be seen if the streamer will continue to see positive impacts from its decision.
