Netflix Ends Password Sharing In India To Bolster Revenue Growth

Streaming giant Netflix has started banning password sharing in India as it looks to bolster revenues in the second half of 2023. 

In a letter addressed to shareholders, the company said that it will extend the ban on password sharing to almost all the remaining countries. In a separate email sent to Indian subscribers, the company noted that a single account would be limited to a single household. 

“Starting today, we will be sending this email to members who are sharing Netflix outside their household in India. A Netflix account is for use by one household. Everyone living in that household can use Netflix wherever they are…,” said the company. 

The letter also said that the ‘extra member’ functionality will not be available in India. Users looking to share a Netflix subscription will have to transfer existing profiles to their own account at an additional membership cost. 

‘Extra member’ service is essentially a paid sharing feature that allows users to pay an additional amount to continue sharing their Netflix account with others. 

The streaming giant attributed the move (to not offer paid sharing service in India) to recent tariffs cuts in the country, adding that there was plenty of runway due to relatively low penetration in the country. 

“In these markets, we’re not offering an extra member option given that we’ve recently cut prices in a good number of these countries (for example, Indonesia, Croatia, Kenya, and India) and penetration is still relatively low in many of them so we have plenty of runway without creating additional complexity,” added the letter. 

In December 2021, Netflix had slashed the prices of its service in India between 20-60%, which unsurprisingly helped the company grow its engagement and revenues in India. 

The disclosures came as the streaming major released its financial results for the second quarter of the year. The company also reported a profit of $1.5 Bn during the quarter against a revenue of $8.2 Bn in the second quarter of 2023. 

Meanwhile, Netflix’s crackdown on password sharing appears to be bearing fruits. Despite missing its revenue mark, Netflix added a hefty, nearly 6 Mn subscribers as it wrapped up Q2 with 238 Mn total subscribers.

While India has been kept outside the ambit of it, Netflix, in May, rolled out the paid sharing to more than 100 countries including countries such as the United States, Britain, France, Germany, among others. 

The crackdown is part of Netflix’s strategy to spur numbers amid stagnant growth. In the past, multiple users would share a single subscription of the streaming service causing revenue loss to the streaming giant. With this, the platform aims to further spruce up its revenues, even as competitors such as Disney and Paramount continue to rake up heavy losses on the streaming side.

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