Netflix's subscribers rise as crackdown on password-sharing yields results 

Password-sharing was once considered de rigueur among Netflix users. Times have changed. Sharing Netflix passwords with family, friends, or former paramours is not the norm since Netflix decided to put clamps on the practice. Many questioned the streaming giant's decision and wondered whether it would work. Well, to everyone's surprise, it seems to be working.

Why does this story matter?

In 2022, Netflix lost subscribers for the first time in a decade. That was the beginning of the end of password-sharing as we know it. The company identified rampant password-sharing as one of the chief causes behind cooling subscriber growth. Although the platform gained members in the latter half of 2022, it went ahead with the policy.

Average daily signups in the US increased to 73,000

In May, Netflix extended its crackdown on password-sharing to 103 countries, including the US and UK. According to analytics firm Antenna, Netflix saw a massive spike in subscriber acquisition in the US in the four days after it made the announcement (May 23). The company added 100,000 subscribers on both May 26 and May 27. Average daily signups increased to 73,000 during that window.

New signups outweighed account cancellations

To put this into perspective, average daily signups increased by 102% from the previous 60-day period. The spike was also more than what was observed during the initial COVID-19 lockdowns in March and April 2020, Antenna noted. As expected, there were cancellations of Netflix accounts in response to the policy change. However, new signups outweighed cancellations.

Users will be charged extra for sharing Netflix outside household

The data should come as a relief for Netflix, which warned investors of a "cancel reaction." As per Netflix's new policy, an account can only be shared by people in "one household." Users are allowed to share with up to two people outside their household (depending on the plan). However, they will have to pay an extra $7.99 per month for each additional user.

Early signs show Netflix's new policy is a success

It is still early to determine the impact of Netflix's new policy. If the signs are any indication, it seemed to have worked. We will know more about it when the company announces its quarterly earnings result next month.