Netflix Password Sharing Crackdown Testing may have Contributed to Dismal Subscriber Numbers Last Quarter

Netflix Password Sharing: How Netflix Moves Forward Could Make or Break Them

The latest subscriber numbers for Netflix do not look good. Last quarter they were expecting more record subscriber growth, but they missed expectations by 2 million subs. It was one of their most awful quarters since 2013.
Netflix Password Sharing crackdown could mean Less subscribers

Several factors may have contributed to what we once considered the gold standard for TV streaming.

Netflix's official reason for these disappointing results are COVID-19. With everything shut down in 2019, fewer shows were being produced. So their content was lacking in 2020, but there is still way more content than on cable TV, which is many times more expensive.

Here are some other factors that may have contributed to the loss of subscribers.

1. First They Went Woke Then Their Subscriber Count Broke - We've seen this happen with other companies like Dick's Sporting Goods and Coke. When CEOs or Companies jump into the political fray and put their corporate clout behind supporting one side vs the other, there is always a risk of of alienating half their customer base. These decisions could have had a detrimental effect on subscriber growth or could have even contributed to this loss, as many customers may have canceled their Netflix accounts out of anger or frustration.

2. Clamping Down on Netflix Password Sharing - Last month we heard news that they were testing ways to clamp down on password sharing. When someone uses Netflix outside the home network, the original owner would receive a text to enter a code to continue. During a recent analyst call with Netflix CEO and top execs, they were asked about cracking down on Password Sharing.

With 1/3 of Netflix customers sharing passwords, it could seem like a great idea to go after and "turn the screws" on password freeloaders.

In a recent teleconference, Netflix CEO Reed Hastings stated, "We will test many things, but we would never roll something out that feels like turning the screws." see more @

3. Increased Competition - HBO Max, Disney, Peacock, Paramount+ (CBS ALL ACCESS), and others now all have substantial streaming services. And upon startup, a lot of content that was once available only on Netflix moved to competing services. Early bird deals also helped pull subscribers away from Netflix for less expensive platforms.

This could be one of the largest contributing factors for slower subscriber growth. Consumers only have so much time to watch TV, and with hit shows available now on several platforms. Netflix may have also reached their subscriber saturation point. Throwing more money into original content can only take them so far.

These factors could have contributed to the dismal numbers Netflix experienced last quarter. For a long time now, Netflix was primarily the top streaming provider available. The missed target could be just a blip on the radar, and things may pick up for the company next quarter. Or, this could be a bad omen and may be just the beginning of a larger migration of subscribers who are all moving away from Netflix in search of greener pastures.

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