Netflix to crack down on password sharing after record subscriber loss

20 Jul 2022

Image: © Tada Images/

Netflix plans to charge accounts extra for sharing their passwords as the company estimates more than 100m homes are using its service without paying for it.

Netflix reported a record loss of nearly 1m subscribers in the second quarter of the year and shared details of its planned subscription changes.

The streaming giant said it had “under-forecasted” its subscriber loss, as it warned investors in April that it expected a drop of 2m subscribers. It follows the company’s first-quarter loss of around 200,000 subscribers, which was the first time the streaming giant lost subscribers in more than a decade.

Netflix has shared a more positive outlook, as it plans to gain 1m subscribers in the next quarter.

The company recorded revenue of $7.97bn for the second quarter of the year, which is a year-on-year increase of 8.6pc but lower than the expected $8.035bn, according to Refinitiv.

The streaming giant said its short-term focus is to “reaccelerate revenue growth” by improving its monetisation features.

To that end, Netflix shared new details about its ad-supported tier, which the company announced earlier this month. It said this lower-cost subscription tier is planned for early 2023.

“We’ll likely start in a handful of markets where advertising spend is significant,” Netflix said in its shareholder letter.

The company also revealed the early stages of a “paid sharing plan”, which involves asking subscribers to pay extra to add a second home to their account. This is currently being trialled in several countries in Latin America.

Netflix hinted at a crackdown on password sharing earlier this year and said it wanted to “monetise sharing”. The company previously estimated that its service is being shared to more than 100m homes that are not directly paying for the service, making it “harder to grow membership in many markets”.

“Our goal is to find an easy-to-use paid sharing offering that we believe works for our members and our business that we can roll out in 2023,” Netflix said. “We’re encouraged by our early learnings and ability to convert consumers to paid sharing in Latin America.”

The subscription changes come as Netflix has been dealing with an increasingly crowded streaming market.

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Leigh Mc Gowran is a journalist with Silicon Republic