According to Netflix, more than 100 million households worldwide use a shared password, with more than 30 million in the United States also Canada.
Netflix has long ignored password sharing because it has grown without cracking down on it, but it recently announced that it lost subscribers for the first time in more than a decade in the first quarter.
Netflix, the world's largest streaming video company, has warned of an impending global crackdown on password sharing. This time, it appears to be a severe warning, and it could mean an end to the widespread practice of borrowing a family member's, friend's, or casual acquaintance's login information.
Netflix estimates that more than 30 million households in the United States and Canada use a shared password to access its content. According to the organization, more than 100 million additional households are likely to use a shared password globally.
Netflix acknowledged in its quarterly shareholder letter that it purposefully allowed generous out-of-home password sharing because it helped get users hooked on the service. However, as competition from Disney, Warner Bros. Discovery, Paramount Global, NBCUniversal, Apple TV+, and other streamers eats into its growth.
"Our relatively high household penetration, when combined with the large number of households sharing accounts and competition, is creating revenue growth headwinds," Netflix wrote.
Netflix reported a 200,000 paid subscriber loss in the first quarter ended March 31, the first time the company has lost subscribers in a quarter in more than ten years. The company expects to lose another 2 million subscribers in the second quarter.
Globally, the streaming platform currently has 222 million subscribers. It experienced brisk growth during the pandemic, but that surge has since subsided and has now turned negative as Covid-19 quarantines have been lifted. Nevertheless, Netflix has tolerated password sharing because, in the words of co-founder and co-CEO Reed Hastings, the company was "doing fine" without taking any drastic measures.
