While streaming platform Netflix (NFLX) has been warning that it would soon start charging users to share their password since last February, the crackdown was initially limited to a test run in a few select countries.
Countries such as Chile and Costa Rica were the first to get their "sharing privileges" taken away while Canada and Portugal were added by the time Netflix publicly committed to the crackdown that was influenced by falling subscriber counts amid the rise of competing platforms such as Disney Plus (DIS) and Warner Brothers (WBD)'s HBO Max.
DON'T MISS: Netflix Claims It Made a Mistake With Its Password-Sharing Rules
By May 23, the other shoe dropped for Netflix users in the United States when the company published an identical blog post and email announcing that adding another viewer to one's account would $7.99 on top of the basic $15.49-a-month or $19.99-a-month plan. Those opting for the cheapest, $6.99-a-month or $9.99-a-month, plan will not be eligible for password-sharing.
Image source: Jakub Porzycki/NurPhoto via Getty Images
Search Terms Are Surging
"Starting today, we will be sending this email to members who are sharing Netflix outside their household in the United States," Netflix wrote in a not-so-subtle reminder.
While criticism of Netflix has been consistent since it first announced the decision, it reached an apex with that email — according to market analysis site KingCasinoBonus, searches for "cancel Netflix" spiked by 704% after it was sent.
Netflix had earlier estimated that over 100 million households, or around 40% of its users, shared a password with someone not paying for a subscription.
"'Cancel Netflix account,' 'Cancel Netflix,' 'Delete Netflix,' US-based searches rose 382%, 214%, and 162% in the last seven days as Netflix announced its plan to crack down on password-sharing users," the report's authors write.
The highest search jump of all was for "Netflix password sharing" — most likely, users checking whether letting that friend log on once to stream a movie would now be forbidden and just how the blockage would work.
In later clarifications, Netflix specifies that users will need to periodically log into the same account from the same Wi-Fi connection in order to maintain status as the primary account holder.
Netflix May Have Made A Mistake With Password-Sharing Crackdown
While searches do not equal actual cancelations, a number of analysts have predicted a rise in drop-offs that is only starting to be fully accounted for — Netflix has not yet publicly commented on how many subscribers is lost as a result of the change to its subscription rules.
"Netflix's plan to target password-sharing users is aimed at encouraging more people to subscribe," Ionut Catalin Marin, who heads KingCasinoBonus, said in a statement. "However, users appear to have been turned off by this move. These findings show a staggering rise in Netflix users looking to cancel their accounts. As high living costs continue to hit households, this change may encourage users to switch off for good."
But the FT also reported that "after the initial drop-off, [Netflix] subscribers who did choose to stick around soon started adding 'extra member' accounts." Netflix told FT that its Canadian subscribers were, even after the people who voluntarily dropped out, higher than they were prior to the change due to the number of people adding extra viewers to their accounts.
