Netflix’s Crackdown on Password Sharing in Spain Results in a Loss of 1 Million Users

Netflix’s crackdown on password sharing in Spain has resulted in the loss of more than one million users in the country in the first quarter of 2023, according to market research group Kantar. The streaming giant introduced strict measures in February, including a monthly fee and technical measures to detect password sharing, in an effort to combat the issue.

However, Kantar’s research shows that two-thirds of the users who left Netflix in Spain were sharing passwords.

The Steep Drop in Users is Attributed to the Netflix’s Crackdown on Password Sharing

Kantar’s research, which is based on surveys of household streaming habits, showed that the steep drop in users was directly linked to Netflix’s crackdown on password sharing.

Dominic Sunnebo, Global Insight Director at Kantar’s Worldpanel Division, stated that losing a million users, even if most of them weren’t paid subscribers, would be a blow to Netflix in terms of word-of-mouth recommendations for its shows and services. Subscription cancellations in the first quarter tripled compared to the previous period, according to Kantar’s research.

Netflix Remains Optimistic About the Crackdown

In its first-quarter earnings release on April 18, Netflix stated that it saw a cancel reaction in each market when it announced the news of the crackdown on password sharing. However, the company remains optimistic that the dip in users will be momentary and that users who didn’t pay will start signing up for their own accounts.

Netflix pointed to Canada as a reliable predictor for the US, stating that its paid membership base in Canada was now larger than prior to the launch of paid sharing, and that revenue growth had accelerated and was now growing faster than in the US.

Global Password Sharing a Significant Issue

Globally, more than 100 million people use an account they don’t pay for, according to Netflix. However, the company does not break this figure down by country. The company’s crackdown on password sharing in Spain was followed by similar measures in Portugal, Canada, and New Zealand, after a roll-out in several Latin American countries.

Netflix’s Investment in Spanish Language Content Seems to Be Paying Off

Despite the loss of users due to the crackdown on password sharing, Netflix’s investment in Spanish language content seems to be paying off. Kantar’s research showed that in the first three months of 2023, two of the five most-watched series in Spain were available to stream on Netflix.

The company opened its first European production hub in Madrid in 2019, a facility that had doubled in size by the end of last year.

Conclusion

Netflix’s crackdown on password sharing in Spain has resulted in the loss of more than one million users. However, the company remains optimistic that the dip in users will be momentary, and that users who didn’t pay will start signing up for their own accounts.

While global password sharing remains a significant issue, the company is hopeful that similar measures to those implemented in Spain will be successful in other markets. Despite the loss of users, Netflix’s investment in Spanish language content seems to be paying off, with two of the five most-watched series in Spain available to stream on the platform in the first quarter of 2023.