Netflix is gaining record new subscribers, so why it is cracking down on password sharing?

By: |
March 30, 2021 11:43 AM

Netflix has already recognised the problem of password sharing as endemic but has so far tacitly allowed it.

netflixSome Netflix users recently received a message asking them to verify if they were authorized to access the service. (File Photo)

Netflix got a big push during the pandemic as it added around 37 million new subscribers. Some of the popular shows like Tiger King, The Queen’s Gambit, and Money Heist were just the icing on the cake. The OTT platform reported revenue of USD 25 billion during this period and the net profit zoomed to USD 2.8 billion. Amid all this, Netflix has apparently decided to go tough on moochers. In a bid to clamp down on pilferage, the company has started testing a way to prevent subscribers from sharing passwords.

Some Netflix users recently received a message asking them to verify if they were authorized to access the service. “If you are not living in the house with the owner of this account, you need your account to keep watching,” the message said.

Following this, users were asked to verify their account through two-factor authentication. This was done by sending a verification code on the account holder’s email or phone. The warning messages led many people to believe that the end of the era of password sharing being a common practice is nigh. However, this is still in a trial stage and Netflix is yet to take a formal decision on its rollout. But the company insisted that it will help ensure that the only authorised subscribers are having access to accounts.

Netflix has already recognised the problem of password sharing as endemic but has so far tacitly allowed it. Netflix product head Greg Peters said in 2019, “Most Netflix users shared their passwords with their family and friends.” It is unclear how many users violate the terms and conditions of the platform. As per the terms and services of Netflix, the password is not meant to share with people beyond the household.

ALSO READ | Netflix to premiere over 40 India originals this year

But the two-factor authentication is not a full-proof solution to stop password sharing. This is because it allows users to share the codes, though it can cause a little inconvenience, with the person whom they have authorised to use the account.

But there are many observers who are still wondering why the OTT platform is taking such a move at a time when it has registered a record number of new subscribers?

The post-pandemic growth is likely to flatten, this is because Netflix has nearly saturated the US market. Also, it faces formidable competition from other streaming platforms like Prime and Disney+ and this would not let Netflix easily gain new paid subscribers. Reports suggest that Disney+ is growing strong and likely to catch up with Netflix in the next 4-5 years. In order to maintain the lead in the industry, Netflix will have to find a way to stop losing significant revenue through password sharing.

While Netflix is actively trying to make sure that only subscribers have access to its content, the test is still in a very nascent stage and therefore really tough to determine how successful it will be in the coming days. Only time will tell how much this is going to help Netflix in getting new subscribers and generating revenue.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Ramanand Sagar’s Ramayan returns to TV; ‘Sita’ Dipika Chikhlia says ‘history is repeating itself’
2Telugu Film industry hits speed breaker over Covid-19 surge after a great run with Krack and Vakeel Saab
3Coronavirus in Maharashtra: Fresh restrictions put film, television, advertisement shoots on halt