Netflix’s password sharing crackdown appears to be working — at least in the US

Netflix has recorded a surge in new subscriptions in the US after announcing it would start charging additional fees for sharing account credentials with users outside the main customer’s household.
That is according to an analysis by Antenna, which found the video streaming giant added an average of 73,000 new subscribers from 24-27 May 2023, the days immediately following its announcement of a US rollout for password-sharing fees.
The number represented a 102% increase from the 60-day average recorded before the announcement.
Antenna said it was the four biggest single days for US Netflix subscriber acquisitions since it first started analysing the numbers four and a half years ago.
In addition, the ratio of sign-ups to cancellations since 23 May was 25.6% higher compared to the previous 60-day period.
It also exceeded big spikes in subscriptions in the early days of the Covid-19 pandemic.
The graph below from Antenna shows Netflix daily sign-ups in the US from January 2019 to May 2023.
In the US, Netflix charges a $7.99 add-on fee for every additional member that wants to use the service at a different address.
The add-on fee provides a separate account with its own login and profiles.
The cost of the main Netflix account is $15.49 for a Standard plan without ads, so the add-on account is just over half the price of a fully-fledged account.
In countries where the account-sharing fee has been introduced, Netflix makes use of a combination of IP addresses, device IDs, and account activity from devices signed into the Netflix account to determine a “home” address for the main user.
A different story elsewhere
Citi analyst Jason Bazinet previously estimated that Netflix lost about $6 billion in revenue per year due to password-sharing.
While the measure seems to be working in the US, the same cannot be said for Spain, despite the fact that its add-on fee is lower compared to the price of a full Standard subscription.
According to the market research group Kantar, the service lost over a million subscribers in that country in the first three months of 2023. That was over triple the cancellations in the previous period.
Netflix introduced a €5.99 (R121) account-sharing fee in Spain in early February, compared to the $15.49 fee for a Standard subscription.
Kantar’s research linked the decline directly to the new policy, with its households surveys suggesting that two-thirds of those who dropped Netflix were using someone else’s service.
Netflix has not yet confirmed how its paid account-sharing feature will work in South Africa, nor when it will launch or how much it will cost.
The table below shows how much it could cost based on the percentage cost of the Standard plan in some of the countries where it has already rolled out.
It should be emphasised that this is pure speculation at this point.
Netflix account-sharing fees — What South Africans might pay | |||
Country | Add-on account or member fee/ Standard plan price | Percentage of Standard plan price | Speculative South African account sharing price |
Chile | $2,380 CLP / $8,320 | 29% | R46 |
Costa Rica | $2.99 USD / $12.99 USD | 23% | R37 |
Spain | €5.99 / €15.49 | 39% | R62 |
Peru | PEN 7.90 / PEN 34.90 | 23% | R37 |
United States | $7.99 USD / $15.49 USD | 52% | R83 |