Netflix is losing around $391 million a year to password sharing, a crackdown might be in the offing

A recent Reuters report states, "more than one-fifth of young adults who stream shows like Game of Thrones or Stranger Things borrow passwords from people who do not live with them." It has even lead to speculations that password sharing on Netflix may soon be a thing of past; since Thomson Reuters has predicted a Netflix shares slump from 31 percent in the second quarter this year to 19 percent next year.

The survey saw 21 percent of young adults in the age group of 18 to 21 years using the streaming service sharing their passwords. This number is 12 percent for adults. Quartz' Quartz Index showed that Netflix, a streaming service co founded by Marc randolph and Reed Hastings, saw a gradual revenue growth from 2007 to 2015 which is now at $9 billion. However, with 50 million subscribers to its name, there is a fear that the rate of increase in subscriptions might stagnate, lowering the growth rate.

Netflix, popular for bringing the culture of online streaming into the mainstream, may have to give have to crackdown on this password sharing aspect once the quarterly earnings are released on Monday, as per analysts from The Wall Street Journal. Investor pressure to focus on increasing the revenue may lead to this crackdown.

As per Reuters' survey, the password sharing, a misnomer for password borrowing, is used to spend less on video subscription.

Conducted online in English in the US from 8 June to 26 June, the Reuters/Ipsos poll gathered responses from 4,453 adults.


Published Date: Jul 15, 2017 05:57 pm | Updated Date: Jul 15, 2017 05:57 pm