Netflix has been taking steps to address the issue of password-sharing, with reports suggesting that the streaming giant is set to reduce its spending by $300 million as part of its efforts to crack down on the practice.
According to a recent report by The Information, the move is part of Netflix’s strategy to combat the loss of potential revenue from people who share passwords with friends and family members. The report suggests that the company is considering implementing new measures to limit password sharing, such as requiring users to verify their account via text message or other means.
The report comes after Netflix CEO Reed Hastings stated last year that the company was not too concerned about password-sharing, and that it was not a major priority for the company. However, it appears that the issue has become more pressing in recent months, with Netflix announcing in a recent earnings call that it had added 4 million new subscribers in the first quarter of 2021, falling short of the projected 6 million.
Despite this, it is worth noting that password-sharing is not a new issue for Netflix or other streaming services. In fact, a survey conducted by Magid in 2019 found that 35% of all millennials admitted to sharing passwords for streaming services, while a separate study by Parks Associates found that password-sharing cost the industry over $9 billion in 2019.
It remains to be seen what specific measures Netflix will take to combat password-sharing, but it is clear that the issue is becoming more pressing for the streaming giant. As streaming services continue to gain in popularity, it is likely that the issue of password-sharing will remain a top concern for the industry, as companies seek to find ways to ensure that they are able to monetize their services to the fullest extent possible.