As per a recent announcement by Netflix, its crackdown on password sharing has proven to be an immense success. Earlier in 2023, the company began a crackdown against password sharing. It initially started in the United States followed by other countries. Reportedly, the company was able to gain 5.9 million new subscribers from all across the globe. The new followers joined the service in Q2 2023. Among the reported numbers of new subscribers, a million are located in the U.S. and Canada. This information was shared by the company via its earnings report.
Given the huge success of the new policy against password sharing, the company will expand the program to other countries. In May, Netflix stopped allowing multi-household password sharing in the US, which immediately saw a spike in new signups.
The company claims that revenue has increased in regions where paid sharing was announced. On the other hand, the app now has more sign-ups than cancelations. A 2.7% growth in YoY revenue was observed for the company. In the future, Netflix anticipates that revenue growth will pick up speed as it starts to reap the full rewards of paid sharing and more people sign up for its ad-supported plan.
The company has stuck by the policy of password sharing for several years. Users were even permitted to share the passwords with people outside a particular household. However, the company has ended this policy this year. As of now, all users accessing a Netflix account must reside in the same location. Besides this, the company has limited access based on IP and location data.
Tools were made available by Netflix so that users who shared accounts may create their own accounts. More than 100 million homes, according to Netflix, were sharing accounts. Due to this, the capacity of the company was limited to “invest in and improve Netflix” for paying subscribers.
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