June 16, 2023
Netflix sees massive subscriber rise after password-sharing crackdown went into operation. This kind of approach works, resulting in an unprecedented growth of paid clients. Just after implementing the ban on multi-household password sharing within the US market, the average number of new Netflix subscribers on a daily basis reached 73k, a 102 percent increase over the previous 60-day average.
On May 26 and May 27, Netflix witnessed up to 100,000 daily signups, which is even more than during COVID lockdown periods. The number of membership cancellations did not exceed the number of new signups.
According to Netflix, more than 100 million households were sharing accounts, limiting its ability to "invest in and improve Netflix" for paying subscribers. The platform claimed that although it anticipated some cancellations in the US, based on past rollouts in other countries, the new policy will accelerate revenue growth and member base.
This policy, designed to stop families from sharing their accounts with anyone outside of their homes, has given the streaming service its largest rise in new subscriptions in four years. As a result, the platform was the first on the market to develop this new revenue stream - a new kind of model that has since been demonstrated to be efficient and profitable. None of the platform's competitors, such as Disney+, Amazon Prime Video, HBO Max, or Viaplay, opted to take similar moves.
In my opinion, Netflix's resignations are not a threat to the platform itself. In fact, in the short term, the global number of users may shrink, but in the long run, a major part of them will eventually come back, becoming paid subscribers. Furthermore, I think that sharing accounts on streaming platforms cannot be restricted, as it makes no sense - there will always be customers who can figure out a solution like not paying. If the subscription price is reasonably attractive to consumers, they do not need to share access. The users need to be able to choose among a variety of packages at acceptably affordable prices and receive additional benefits if purchasing a long-term subscription. This is a win-win situation - if I can choose a reasonable price, I will pay the subscription as it is easier than figuring out any unauthorized access.
And here's a little tip: It's also important to consider the number of profiles that can be set up within one account on a given platform, as well as the number of connected devices. Furthermore - what is essential in the case of families with children - is how many people can use a given streaming service at once, and even how many people can watch the same piece of content at the same time but on separate devices. It all comes down to how many devices are there within one household - who knows, maybe this will be the next income stream.
#StreamVX #SzymonKarbowski #streamingwars
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