Netflix’s Crackdown on Password Sharing: Prioritising Profit Over Convenience

Netflix, the global streaming giant known for its extensive library of films, series, and documentaries, is cracking down on password-sharing. Since February 2023, the OTT platform has been informing users that their accounts can only be used by household members, a move that targets the common practice of sharing accounts to reduce costs, especially among students on a tight budget. The new rules and regulations lead us to question Netflix’s apparent prioritisation of consumerism over creativity, as they continue to focus on increasing revenue through stricter policies.

Netflix is the most popular video streaming service that offers films, series, documentaries, animations, and the like, in multiple languages and is streamed across numerous countries in the world. Recently, several Netflix users have been met with the screen displaying ‘This TV isn’t a part of your Netflix household’ when they are opening their accounts. This is due to their new policy, which was introduced in February 2023, preventing family and friends from sharing accounts outside of one’s residential space. For many of us, Netflix has always operated on the premise that one person pays the bills while several others share the account. This practice has become common since the streaming giant became popular in India. Due to its accessibility, it has been a major source of entertainment for people. Until now, being able to share accounts and split money between many has helped students and others on a tight budget to afford it.

Founded in 1997, Netflix originally started as a DVD rental service by mail, allowing unlimited rentals with a monthly fee, and has evolved into the streaming service it offers on the internet directly today. The multibillion-dollar industry is seeking to increase its subscriber base to garner even more money. The ban on password sharing has been introduced in over 100 countries, with the OTT platform sending emails to users informing them that their account is intended solely for them and members of their household. If someone outside their household is using the account, they are instructed to transfer their profile to a new paid account and consider changing their password. The move is ironic, considering how in 2017, the Twitter account of Netflix itself posted, “Love is in sharing a password”.

It is no news that Netflix has definitely had a hand in changing the TV industry. It was the first video-on-demand streaming service to be introduced in 2007. Even With the emergence of other new streaming services following suit, Netflix remains the largest service in the world, with 269.6 million paid subscribers. It has allowed viewers to watch content from anywhere on any device possessing the capability to stream videos, which is what made many love it –for its accessibility. Despite all this, the multibillion-dollar company is taking away one of its assets, that made people buy a subscription in the first place, to generate more revenue. And it’s working. As people struggle to buy subscriptions after the password-sharing ban, Netflix has seen an increase in its ad-supported plan. The plan, which has been introduced in 12 countries thus far, including the United States and Australia, offers commercial breaks between streams. There have also been reports of taking down the cheapest ‘Basic’ ad-free plan altogether, starting in Canada and the UK this year. This change would leave subscribers with only two ad-free options: the $15.49 (₹1,291.55) ‘Standard’ plan or the $22.99 (₹1,916.90) ‘Premium’ plan. By ending the ‘Basic’ plan, Netflix effectively removes a middle ground for viewers on a tight budget.

In India, Netflix cut the prices of its subscription plans by 20–60% in December 2021 to attract a larger customer base. Previously considered a high-end service in the country, this strategy proved effective for the company. Engagement in India has increased by nearly 30% year-on-year, and in October 2023, a Bernstein report indicated that its total number of subscribers in India had reached approximately 6.5 million. However, despite reduced prices, it remains the most expensive streaming service in the country. 

Despite the concurrent backlash it received for its brutal crackdown on password sharing, Netflix, surpassing analysts’ estimates, recorded an addition of 9.33 million new subscribers in the first quarter of 2024, marking a significant increase in its global user interface. Although in the face of its increasing subscribers, there has been a simultaneous phenomenon of previous subscribers cancelling their subscriptions or refusing to renew them again. According to a report by the market research group Kantar, the streaming service lost more than a million subscribers from Spain in the first quarter of 2023. 

It seems that Netflix is giving more importance to consumerism over creativity. The streaming service continues to find ways to get its users to upgrade to more expensive plans or compel them to stay subscribed to the most basic plans while increasing ads. Its success in implementing these policies cannot be denied, leading us to acknowledge the company’s tactics in doing so. Despite this, the growing number of users turning away from it also cannot be overlooked. Over the years, there has been a rise in other streaming services besides Netflix, which provide entertainment content at a more affordable rate, that people have turned to. This is especially true in India, where other more cost-effective services such as SonyLiv, JioCinema, and Amazon Prime are easily available and continue to become more popular day by day. Which leads us to wonder what the world’s biggest streaming giant will do to continue expanding, or will it eventually be overtaken by its emerging competitors?

Sidra Aman is a student pursuing English Literature from Jamia Millia Islamia.

Edited by: Sana Faiz