Netflix’s new plan to crack down on password sharing in the United States is already starting to pay off, with a greater increase in new subscriber sign-ups than when the Covid pandemic first hit. This is according to data collected by streaming analytics company Antenna, which reported on Friday that Netflix gained 3.9 million new subscribers in the U.S. over the past two months. This is compared to the 2.2 million gained during the same period in 2020.
This increase in new subscribers is a sign that the company’s plan is working, as it has implemented a number of measures to prevent people from sharing passwords, such as introducing two-factor authentication. Netflix also recently began to target people who are using someone else’s password to access its services by sending out warning emails.
Netflix’s efforts to crack down on password sharing are part of its strategy to increase its revenue and profit margins. Since the pandemic began, the streaming service has been looking for ways to boost its bottom line, and this appears to be one of them. As the company continues to crack down on password sharing, it is likely that its new subscriber numbers will continue to rise.
Previous estimates put the number of households sharing accounts at above 100 million.
The website informed US members last month that they would need to add an additional member to their account for a $7.99 monthly cost or open a new account if they shared passwords with anybody outside of their homes. Additionally, users with unauthorized passwords will be blocked.
Antenna, a firm that tracks subscription sign-ups and cancels, reported an increase in sign-ups that exceeded the spikes observed during the initial US Covid-19 lockdowns in March and April 2020. The report also noted that cancels increased during the same period, though not as much as sign-ups.
The news was met with a positive response from investors, with Netflix (NFLX) shares rising nearly 2% in early trading Friday, and up 27% over the last month to around $415.
Earlier this year, the business began to crack down on password sharing in a number of nations, including Canada, New Zealand, Portugal, and Spain.
In the first quarter of this year, Netflix reported a net growth of 1.75 million global streaming customers, up over 5% from the same period last year, but under the more than 3 million Wall Street analysts had predicted.
Netflix reported during an earnings call last month that the new paid sharing option had met with a “cancel reaction” in each market when the news was announced. However, the company has also seen “increased acquisition and revenue” following the introduction of the new system. This suggests that while the initial response may be negative, the long-term benefits are proving to be worth it. Netflix is confident that the new option is beneficial to its customers and the business alike, and will continue to pursue it in the future.