The ‘Why’ and ‘What after’ of the Netflix Password-Sharing Crackdown

The ‘Why’ and ‘What after’ of the Netflix Password-Sharing Crackdown | The Enterprise World

How often does it happen that in a group of five friends, each one buys a subscription to an OTT platform and shares the password with the remaining four? 

I bet you all have tried this at least once. This trick saves money as well as provides options to jump from one platform to another whenever we want. This type of password sharing has become very common, especially since the pandemic hit and people were searching for sources of entertainment from home. 

But what if we tell you this might not be possible a few months from now?

Yes. OTT platforms like Netflix, Amazon Prime, Disney+ Hotstar, etc. have become aware of the fact that many of their users are sharing their passwords with others, and that many people are enjoying the services of the platform under one subscription. Netflix password-sharing crackdown is currently the talk of the town as the streaming giant is the first to take steps against this phenomenon.

Before we get into what Netflix did, firstly let’s see,

Why password sharing is becoming a major issue for OTT platforms? 

While password sharing has brought convenience for customers, it has significantly halted the growth of OTT platforms both in terms of revenue as well as popularity. Statistics show that OTT platforms are steadily losing their subscribers. According to reports, Netflix lost a staggering 200,000 million subscribers in the first quarter of 2022, followed by 1 million in the second quarter. And this is not the problem with Netflix alone. Another shocking report states that overall video streaming subscriptions in the UK fell by 2.3 million in 2022. 

While there might be various reasons for these staggering losses, password sharing is being hailed as one of the most significant ones. People are not opting to buy individual subscriptions or even keep their subscriptions to themselves. Password sharing has allowed them the luxury of enjoying and sharing the benefits of multiple platforms at a minimal cost, or even free sometimes. This might be much more concerning than some severe issues like piracy, as it is directly impacting the revenue of the service providers. And it was a no-brainer that someone was going to do something to stop this. 

What exactly is Netflix Password-Sharing Crackdown?

What exactly is Netflix Password-Sharing Crackdown

Having suffered from a major subscriber loss, Netflix had already started to address this issue. The streaming giant has recently shared the first details of the Netflix password-sharing crackdown. As per Netflix’s help center, the new rules are as follows:

  • The account will remain shareable, but only within one household.
  • Users will have to identify a primary location for all accounts that live within the household.
  • All the accounts should be linked to the same Wi-Fi.
  • To prevent the account from getting blocked, users will need to sign in to that Wi-Fi at least once every 31 days.

Will this solve the Password Sharing Puzzle for OTTs?

The Netflix password-sharing crackdown has definitely grabbed highlights. However, we are yet to see a response from the likes of Amazon Prime, Disney+ Hotstar, SonyLIV, etc. While the decision seems promising in terms of the future of such platforms, its aftereffects might be seen after it is completely implemented. 

Will this solve the Password Sharing Puzzle for OTTs?

One thing is sure, the proverb ‘sharing is caring’ which we were taught in the childhood, is on its way to becoming obsolete! (Of course, only in case of password sharing.)

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