The global streaming colossus Netflix is extending its password-sharing crackdown to consumers in India and every other market beginning today after a limited rollout of the restriction helped the company add nearly 6 million subscribers in the quarter ending in June.
The streaming colossus announced on Thursday that it will address account sharing between households in nearly all of its remaining countries. Once a proponent of account password sharing, Netflix now sees it as posing complex challenges to its business prospects.
In 2023, it will be implemented in Canada, New Zealand, Portugal, Spain, and the United States, much to the displeasure of many subscribers. In some of the aforementioned markets, Netflix permitted users who shared the password with acquaintances to pay an additional fee.
The company has clarified that it will not be introducing a new membership option for consumers in countries where it has recently implemented account-sharing restrictions.
The company explained in a letter to shareholders that the decision was based on the relatively low market penetration in these markets and the availability of more affordable Netflix subscription tiers.
“In these markets, we’re not offering an extra member option because we’ve recently reduced prices in a number of these nations (such as Indonesia, Croatia, Kenya, and India) and penetration is still relatively low in many of them, so we have plenty of room to grow without adding complexity. Netflix will allow households to transfer existing profiles to new and existing accounts.
The restriction on password sharing by Netflix contributed to the company’s strong subscriber growth in the quarter ending in June, the company announced on Wednesday. Following a loss of nearly 1 million customers in the same quarter of the previous year, the company reported a gain of 5.9 million subscribers in the current quarter. Individuals who are no longer able to share the service for free and have chosen to pay for their own accounts are primarily responsible for this increase.
According to Netflix CFO Spence Neumann, the company’s revenue growth is “largely driven by our paid sharing rollout.” He added, “It is our primary revenue driver for the year, and we anticipate the impact to grow over a number of quarters.”
The ongoing endeavor against password sharing may pose a threat to Netflix’s competitive advantage in certain markets. Take India as an example, where JioCinema, a platform sponsored by James Murdoch and Mukesh Ambani, provides Netflix with stiff competition.
Not only does JioCinema stream numerous renowned television shows and films from NBC, HBO, and Warner Bros., but it also hosts some of the most sought-after sporting events in the region. An annual subscription to JioCinema costs approximately $12.