2 million subscribers are expected to leave the platform in the next 3 months
It’s being reported that Netflix is planning to crack down on subscribers that are sharing passwords. Netflix reported that around 200,000 left the platform in the first 3 months of the year, with another 2 million expected to leave in the next 3 months.
It’s been estimated that around 100 million subscribers are breaking the rules by sharing passwords.
It’s a double-edged sword because it’s password sharing that helped fuel the account growth on the platform.
I spend part of my year living in Thailand and it always puzzles people how so many Thais can afford a Netflix account. The cost might be reasonable by Western standards, but it’s fairly expensive for the average Thai. If you ask Thais how they can afford it, the answer is always that they split the cost with friends.
Netflix is currently testing measures to stop password sharing in Latin American countries. These measures will get rolled out to other countries.
This plan could easily backfire though. We’re in the midst of a serious economic crisis, with many people looking for ways to cut back their spending. If subscribers are forced to stop sharing passwords with friends, many will likely leave the platform rather than pay full price.
Millions of people simply can’t afford to pay the full monthly fee on their own. So while the company may gain some subscribers, it could possibly lose a lot more than it gains.
If the company is already expecting 2 million to leave, it doesn’t bode well for the estimated 100 million that are sharing their passwords.
The company has already lost 700,000 Russian subscribers. Another 600,000 people from the US and Canada quit the service after prices rose in January.
The basic plan in the US rose from $9 to $10 (+11%), while the standard plan rose from $14 to $15.50 (+10%). If the rise is enough to prompt 600,000 people to leave, how many of the 100 million shares leave if they have to pay double or triple what they’re currently paying?
I’ve even had comments on some of my posts here from people that have said they have quit Netflix.
To help increase revenue, Netflix is considering launching a free ad-supported service. This would likely bring in many new subscribers, but they likely won’t be anywhere near as profitable as paying subscribers. It could also result in paying subscribers switching to a free ad-supported service.
What puts me off subscribing is that I don’t watch TV very often, so can’t justify the full fee just to watch something once or twice a month. I’d be more inclined to join if the platform was supported by ads instead of a subscription fee.
Do you subscribe to Netflix? If so, do you have any plans to quit the service?
If you enjoyed reading this, you may also like the following article where I provide 5 actionable steps you can take to get through the current economic crisis.