Netflix’s crackdown on password-sharing in Spain has resulted in the loss of more than a million users, a recent report by Kantar has revealed. The streaming giant introduced a €5.99 ($6.57) monthly fee in February for users in Spain who shared their login details with another household and implemented technical measures to detect such sharing. However, the new measures have backfired, with the loss of a million users, two-thirds of whom were using someone else’s password, according to Kantar’s research.
The decline in subscribers is a major blow to Netflix, as word-of-mouth recommendations for its shows and services are key to its success. Although not all of the lost subscribers were paid members, subscription cancellations in the first quarter tripled compared to the previous period, according to Kantar’s research.
Netflix said that it was expecting a temporary dip in subscribers due to the password-policing plan, but that the introduction of a cheaper streaming version with ads would help accelerate growth in the second half of 2023. The company also claimed that the situation in Canada, where revenue growth has accelerated since the launch of paid sharing, is a reliable predictor for the US.
The move to clamp down on password-sharing is part of Netflix’s broader efforts to boost revenue and profitability. Globally, more than 100 million people use an account they don’t pay for, according to Netflix, which monitors IP addresses, device identifications, and account activity to detect password sharing.
Despite the loss of subscribers, Netflix’s investment in Spanish-language content seems to be paying off. Two of the five most-watched series in Spain in the first three months of 2023 were available to stream on Netflix, according to Kantar. The company also opened its first European production hub in Madrid in 2019, which doubled in size by the end of last year.
The password-sharing crackdown has clearly had a significant impact on Netflix’s subscriber base in Spain, but the company remains optimistic about the future. As the streaming giant continues to expand its offerings and invest in local content, it is likely to remain a major player in the global media landscape.
