No wonder Netflix is biding its time before cracking down on password sharing in the U.S., with recent figures from Spain showing an eye-popping drop in Netflix users after the streamer launched efforts to stem the password-sharing tide.
According to market research firm Kanter, more than a million users in Spain departed Netflix in the first quarter of 2023 after the company began charging subscribers who want to share their accounts.
That drop in usage was an “immediate result” of Netflix’s password-sharing crackdown, the researchers said.
The trend in Spain may get even worse, with roughly 10 percent of “remaining” Netflix subscribers saying they plan to cancel in the coming quarter–a figure that’s “well above the average” of previous time periods.
Of course, most of the one million users who ditched Netflix in Spain last quarter weren’t paying a dime for the service.
But Dominic Sunnebo, global insight director at Kantar’s Worldpanel Division, said he believes the dip in user numbers has “major implications for Netflix and whether it decides to continue with its crackdown globally.”
Earlier this month, Netflix said it would delay its plans for a “broad rollout” of “paid sharing plans” in the U.S. to the second quarter of the year, meaning the password-sharing crackdown could begin sometime before July.
Netflix began charging subscribers for sharing their accounts in Canada, New Zealand, Portugal, and Spain in February, following several pilot programs that launched in Latin America last year.
Those who can’t verify their Netflix accounts or who aren’t streaming under the sub-account of a paying subscriber are subject to being blocked.
Netflix estimates that more than 100 million households are sharing passwords with non-subscribers, a practice that is “impacting our ability to invest in great new TV and films.”
Netflix lost subscribers for the first time in a decade in the first quarter of last year, but the streamer has been slowly adding to its subscriber tally again following that dismal Q1 2022 report.
