July 7, 2022

Netflix blames 100 million password subscribers for disrupting subscriber growth

Netflix blames 100 million password subscribers for disrupting subscriber growth

Netflix announced in March that it Planning to eliminate password sharingand in the first quarter earnings letter to shareholders (PDF), it gave a great idea of ​​why.

First, it is increasingly clear that the pace of growth in our primary addressable market (broadband homes) depends in part on factors we do not directly control, such as the uptake of connected TVs (since the majority of our viewing is on TVs), the adoption of entertainment and data costs when the demand. We believe these factors will continue to improve over time, so that all broadband families become potential customers for Netflix. Second, in addition to our 222 million paying families, we estimate that Netflix is ​​shared with over 100 million additional families, including over 30 million in the UCAN region. Account participation as a percentage of our paid membership hasn’t changed much over the years, but, combined with the first factor, means it’s hard to grow membership in many markets — an issue that our COVID growth has obscured.

Netflix has 222 million “paid families,” but it estimates that the service is shared with more than 100 million “extra families,” 30 million of which are in the United States and Canada. This indicates that there are a large number of people who do not pay Netflix directly for the ability to stream their favorite shows.

At the moment, the company is testing New feature In Chile, Costa Rica and Peru where subscribers can add “sub-accounts” for up to two people outside their home at discounted rates. It’s unclear when the testing could be expanded to more countries, but given how many people who watch Netflix can pay but don’t pay, it seems likely that Netflix will want to roll it out more widely sooner than later.

Netflix also revealed on Tuesday that it has lost subscribers For the first time in a decade The last quarter.