Netflix is facing a drop in its user base in Spain as a result of its efforts to curb password sharing. According to a new study conducted by market research group Kantar, one million of the streaming service’s users have left so far in the first quarter of 2023. This has resulted in a 15% decrease in the total number of subscribers.
In February this year, Netflix introduced a €5.99 fee on those sharing passwords with households other than their own. According to Kantar, this has caused the decline in Netflix’s users. Out of the million that left, two-thirds were gaining access to Netflix by password sharing. This has not only been a drop in the user base but also a loss in revenue as one-third of the drop was from paid subscribers.
The study found that subscription cancellations nearly tripled in the first quarter of 2023 compared to the previous period and 10% of existing subscribers plan to cancel their plans by the second quarter. Moreover, competition in the country is increasing with Amazon Prime Video accounting for the majority of new subscriptions at 34.4%. Sky Showtime, launched in 2021, is in second place at 32.6%.
Recently, Netflix’s Chief Operating Officer and chief product officer, Gregory Peters, noted during an earnings call that about 100 million households are using credentials that are not legally theirs to access Netflix. He shared that the goal is to convert many of these users to paid accounts over this year, although there will be a cancel reaction in the beginning.
In addition to Spain, the new password policy has been implemented in Portugal, Canada and New Zealand after testing across Latin America. Despite lower targets for the first quarter of 2023, Netflix hopes that the cheaper add-on based subscription prices in addition to its new policy will help revive growth in the second half of the year.
Netflix is an American streaming service company that was founded on August 29, 1997. It was founded in Scotts Valley, California, by Reed Hastings and Marc Randolph. The company produces and distributes content from networks, studios, and independent producers. It also provides users with a platform to watch TV shows, movies, and documentaries.
Ioanna is a writer at TNW. She has a multi-disciplinary background, with a degree in humanities, giving her a special interest in social-impact enabling technologies, start-ups and sustainability. Her portfolio covers the full spectrum of the European tech ecosystem, with a focus on artificial intelligence, green tech and EU policies.
