More than a quarter of UK Netflix subscribers allow friends and family to use their accounts, with at least 17million households sharing passwords across the struggling streaming platform’s biggest markets in Europe.
Netflix has announced plans to crack down on the practice as one of several strategic moves designed to stem investor panic after it wiped more than $60bn (£47bn) from its market value last week when it reported its first subscriber loss in a decade.
The world’s biggest streaming service, which expects its 221 million global subscriber base to drop by millions when it releases its next round of results covering April to June, estimated that around 100 million households that pay for its service worldwide share their passwords with others.
In the UK, at least 27% of Netflix’s estimated 14.9 million subscribers, over 4 million accounts, allow other households to use their accounts to watch shows from Bridgerton to Stranger Things for free, according to research firm Digital i, which said the true figure is almost certainly higher.
“Our estimates come from analysis of account activity, and we have corroborated this with various other sources,” said Ali Vahdati, chief executive of Digital i. “That said, we still believe that our results slightly underestimate the [actual] impact of password sharing.
Its analysis found that account sharing is more prevalent among younger Netflix fans, with at least 29% of UK subscribers aged 18-24. This compares to a more moderate 18% of 45-54 year olds.
The research found that in Netflix’s five biggest European markets – the UK, Germany, Spain, France and Italy – a ‘minimum’ of 17 million subscriber households share their passwords . Spaniards proved to be the most prolific sharers, with 47% of subscribers, followed by Germany (42%), France (35%) and Italy (33%). The UK, Netflix’s largest European market by far, has the lowest level of password sharing of the five.
A decade of barnstorming growth had previously led to Netflix taking a lenient approach to password sharing, with the company’s co-founder and co-CEO Reed Hastings saying it had “no ‘intention’ to suppress this practice.
“Password sharing is something you have to learn to live with because there is so much legitimate password sharing, like you share it with your spouse, with your kids,” he said in 2016. “So there’s no clear line, and we’re fine like that.
However, a combination of Netflix nearing saturation in many of its biggest markets, growing competition from rivals such as Amazon and Disney+, and a series of price increases has put pressure on the company’s growth. company, prompting management to change its tone.
“When we grew up fast [password sharing] wasn’t a priority, but now we’re working very hard on it,” Hastings said during the company’s financial update last week.
Last month Netflix began a trial charging subscribers in Chile, Costa Rica and Peru – password sharing is particularly high in Latin America – $2-3 per month to add up to two additional profiles in outside their homes on their own.
The UK streaming boom came to a halt in the first quarter of this year. Last week, research by Kantar showed that the number of UK households with at least one paid subscription streaming service fell by 215,000, ending a decade of uninterrupted growth as households slashed their budgets for deal with the cost of living crisis.
The study found that the proportion of consumers planning to cancel at least one video streaming service citing “wanting to save money” as the reason reached an all-time high of 38%.