Streaming giant Netflix has taken a significant step to bolster its revenues in the second half of 2023 by banning password sharing in India. In a letter to shareholders, the company announced its intention to extend the ban on password sharing to nearly all remaining countries. In a separate email sent to Indian subscribers, Netflix informed users that a single account would now be restricted to a single household.
No More ‘Extra Member’ Functionality in India
As part of the ban, Netflix has discontinued the ‘extra member’ functionality in India. This paid sharing feature allowed users to pay an additional amount to continue sharing their Netflix account with others. Going forward, users interested in sharing a Netflix subscription will need to transfer existing profiles to their individual accounts at an additional membership cost.
Citing Tariff Cuts and Market Penetration for the Move
Netflix attributed its decision not to offer the paid sharing service in India to recent tariff cuts in the country. The company stated that due to relatively low penetration in the Indian market, there is still significant growth potential without the need to create additional complexity through the ‘extra member’ option.
Netflix Financial Results and Subscriber Growth
The move comes as Netflix released its financial results for the second quarter of the year. During this period, the company reported a profit of $1.5 billion, generating revenue of $8.2 billion. Despite missing its revenue target, the platform added nearly 6 million subscribers in Q2. The total number of subscribers now stands at 238 million.
Netflix Global Approach to Password Sharing Ban
More than 100 countries, including the United States, Britain, France, and Germany, have implemented the crackdown on password sharing. However, India remains outside its scope. The ban on password sharing is part of platform”s strategy to drive subscriber numbers amid stagnant growth. By curbing multiple users from sharing a single subscription, the platform aims to optimize its revenues while competitors like Disney and Paramount continue to grapple with heavy losses in the streaming sector.
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