Netflix’s Crackdown on password sharing results in a Surprising Subscriber Increase!

The rise of smartphones and super-fast internet technologies like 3G, 4G, and LTE has completely changed how we consume media in the digital age. The popularity of subscription video-on-demand (SVOD) services has released users from the restrictions of conventional TV schedules by enabling them to access digital material from any location in the world. 

Global streaming conflicts

A significant trend emerging in the SVOD industry is the shifting spending habits of subscribers. A staggering 35% of SVOD customers now find themselves spending excessively on streaming services, prompting them to seek ways to cut back on their expenditures. This amount is three times larger than in 2019 and represents a remarkable 40% rise from the prior year. On the other hand, only 5% of subscribers show interest in spending more on SVOD services, marking a sharp decline of 38% from 2022. Despite the rapid growth and fragmentation within the SVOD landscape, one streaming giant has maintained its position as the global leader – Netflix, with more than 220 million subscribers globally, continues to be the service of choice for viewers in most nations. Trailing closely behind, Amazon Prime boasts an estimated 200 million subscribers, while Disney+ has experienced rapid popularity since its launch and has amassed an impressive 157.8 million subscribers.

In the Chinese market, two local streaming services have emerged as major contenders. Tencent video leads the way with 124 million subscribers, followed closely by iQIYI with 106 million subscribers. Meanwhile, HBO Max has gained substantial traction with 82.6 million subscribers, Hulu boasts 48.1 million subscribers, and Apple TV+ has captivated 40 million subscribers. Although Netflix, Amazon prime video, and Disney+ dominate the streaming landscape in most countries, their market share varies significantly. For instance, Netflix dominates the US market with a 51% share, followed by Amazon prime video (23%), and Disney+ (8%). In the UK, Disney+ has a 16% market share, Amazon prime video has a 29% market share, and Netflix leads with a 47% market share. In India, Netflix has a 26% market share, Amazon prime video at 25%, and Disney+ Hotstar at 24%.

Rising costs and competition 

While these SVOD platforms continue to dominate the global market, they also face a few challenges. Netflix’s recent decision to crack down on password sharing generated both losses and gains in subscribers. An astounding 62% of password borrowers indicated that they would stop using Netflix and opt to purchase their accounts instead. In contrast, this measure has a positive outcome and resulted in a significant increase of 5.9 million new subscribers during the quarter ending in June 2023, although it lost 200,000 subscribers at the time of its announcement. Nevertheless, Netflix estimates that a staggering 100 million households are still sharing passwords, costing the company billions in revenue each year. The crackdown on password sharing is an attempt to recoup some of this lost revenue. In terms of cost, Netflix is by far the most expensive streaming service globally. The standard and premium plans are $15.49 and $19.99 per month, respectively, while the entry-level package is $9.99. With an ad-supported plan price of $9.99 per month and an ad-free plan price of $14.99 per month, HBO Max comes in second. With a basic plan costing $7.99 per month and a premium plan costing $9.99 per month, Disney+ comes in third. The basic plan for Amazon prime video costs $8.99 per month, while the premium plan costs $12.99 per month, making it the fourth costliest streaming service overall.

The development of smartphones and high-speed internet technology has fueled the SVOD industry’s rapid expansion. Although Netflix, Amazon prime video, and Disney+ continue to rule the global streaming business, there is still an intense rivalry.