In a whirlwind of entertainment evolution, Netflix, Inc. (NASDAQ: NFLX) has been making waves with its revolutionary updates over the past year. One of these game-changing transformations is the epic battle against password sharing. Started in the United States, the US streaming giant has now set its sights on India, rolling out a strategy to crack down on those sneaky password-sharers who’ve been enjoying the service beyond their immediate family circle. So, no more free Netflix in India, folks!
As they say, sharing is caring, but sometimes it’s just not fair. Back in March 2021, Netflix began testing a feature aimed at reducing account password sharing. Fast forward to 2023, the company made it clear that they won’t stand for users stretching their account access to far-flung friends and distant acquaintances. So, if you’re borrowing your cousin’s best friend’s Netflix login credentials, you better watch out for that email notification coming your way!
Netflix India Bans Password Sharing
Starting today, Netflix is taking action by sending emails to all its paid members who have been caught red-handed sharing their accounts far and wide. The company is keen on maintaining its position as the go-to streaming destination for entertainment, but with a new emphasis on responsible usage.
Netflix highlights the importance of using a Netflix account exclusively within one household, fostering a sense of togetherness as everyone indulges in binge-watching together. This approach ensures a fair and sustainable streaming experience for all users.
However, despite the restrictions on Netflix account sharing, there’s no need to worry about enjoying your favourite shows and movies with your loved ones. Whether you’re cuddling up on the couch, exploring new places on holiday, or on a spontaneous road trip, Netflix has got you covered. The platform has introduced some cool features like Transfer Profile and Manage Access and Devices to make the streaming experience smoother for users.
Netflix’s crackdown on password-sharing is not limited to India; it extends across more than 100 countries worldwide. The company has taken decisive actions to impose restrictions on password-sharing in major markets such as the United States, Britain, France, Germany, Australia, Singapore, Mexico, Brazil, and many others.
Impact of Password Sharing Curb on Indian Users
With the rise of various OTT players like Disney+ Hotstar, Amazon Prime Video, JioCinema, and others in the Indian market, Netflix is well aware of the fierce competition it faces.
According to consultancy firm Arthur D Little, Netflix has only 6.1 million subscribers in India. In contrast, its arch-rival Disney+ Hotstar has an impressive subscriber base of 52.9 million, and Amazon Prime Video follows closely with over 22.3 million subscribers. This data highlights the intense competition among these streaming platforms as they strive to capture the attention and viewership of Indian audiences.
The main difference between Netflix and Disney+ Hotstar lies in their subscription offerings. Netflix is known for its emphasis on providing an entirely ad-free streaming experience to all its subscribers. Currently, Netflix provides four subscription plans in India with varying features and price points. The mobile plan is priced at ₹149 per month, while the basic plan costs ₹199 per month. The standard plan is now priced at ₹499 per month, and the premium plan comes at ₹649 per month. The standard and premium plans are tailored for home viewers who enjoy consuming OTT content on their TVs in high-definition quality, including 1080p (Full HD) and 4K (Ultra HD) + HDR resolutions.
On the other hand, Disney+ Hotstar offers three paid subscription plans, two of which are ad-free and one is ad-supported. These subscription plans allow users to choose between different subscription tiers based on their preferences and budget. Additionally, Disney+ Hotstar offers a free signup option, allowing users to access certain content without any subscription, but with ads, making it more accessible to a broader audience.
Now, the burning question is: How will Netflix’s move to curb password sharing in India affect its subscribers?
Well, Like any coin, it has two sides. Stricter enforcement of password-sharing rules will limit unauthorized access to Netflix content, discouraging those who were using someone else’s account without a legitimate subscription. The platform might lose a significant number of subscribers, including genuine and freeloaders.
For instance, four college students share a single Netflix account on Tv, Dekstops and Mobile. With the implementation of the password-sharing crackdown, all four may now be required to sign up for individual accounts if they wish to watch Netflix content simultaneously on different laptops or other devices. This change could result in their TCO (Total cost of ownership) shooting up by 2X to 4X, potentially prompting them to revisit their decision to buy subscriptions, and ultimately leading all four of them to unsubscribe from Netflix. If a considerable number of users find themselves in similar situations, it has the potential to cause a decline in Netflix’s subscriber base in India.
With approximately 6 million total subscribers in India, losing around 10% of them, which translates to approximately 600,000 paid subscribers, would have a notable impact on the company’s revenue and overall subscriber base. While 10% may seem like a significant percentage, it is crucial to recognize India’s price-sensitive consumer behaviour, where their shopping decisions are often pegged to discounts and freebies in various aspects of their lives, including entertainment.
On the positive side, the restriction of account access to a single household might cause inconvenience for youngsters who won’t be able to watch certain content with their parents or other family members. To overcome this, households may consider signing up for additional paid subscriptions to accommodate everyone’s preferences and viewing habits. This could potentially lead to an increase in the number of paid subscriptions and, in turn, contribute positively to Netflix’s India revenue.
In conclusion, Netflix’s decision carries potential benefits in terms of reducing unauthorized access and potentially gaining more paid subscribers, but it also brings challenges in terms of accommodating diverse viewing habits within households.
Netflix’s Content Strategies to Woo Indian Customers
In order to gain a sizable share of the Indian OTT market, Netflix has also been doubling down on investing in a dazzling array of new films and TV shows that cater to all tastes, moods, and languages.
Netflix assures its subscribers that they need not worry about finding engaging content that suits their preferences, no matter who they are watching with or what their personal tastes may be. With its extensive content library, the platform promises to offer something thrilling and satisfying for everyone, making it a go-to streaming service for entertainment in India.
Unlike its competitors such as Disney+ Hotstar, Prime Video, and JioCinema, Netflix’s focus extends to both local and international movies and original web series, spanning various languages like English, Japanese, Korean, Spanish, Hindi, Marathi, Malayalam, and more. To strengthen its presence in the Indian market, Netflix has initiated partnerships with notable producers like filmmaker Hansal Mehta in June 2023. Through this collaboration, Mehta will create multiple series, such as Scoop, for Netflix in the upcoming years, amplifying the platform’s offerings.
Furthermore, Netflix actively celebrates the growing popularity of non-English films from the Asia Pacific region. By engaging top creators from the region to delve into the essence of successful stories, the platform showcased over 80 APAC films on its Top 10 weekly global Non-English Film list in 2022. Notably, films from India, Indonesia, and Korea have consistently taken the No. 1 spot, demonstrating the growing appeal of diverse content on Netflix.
In 2022, the impact of Indian films and series on Netflix’s global viewers was nothing short of remarkable. Each release from India, on average, trended in an impressive 8 countries, demonstrating the immense popularity and broad international appeal of Indian content.
Two standout films, “Darlings” and “Monica, O My Darling,” garnered immense attention and admiration from audiences. “Darlings” recorded the highest opening for any Netflix film in India and was watched in 28 countries, accumulating over 32 million viewing hours. “Monica, O My Darling” also proved to be a hit as it trended at the #1 spot in seven countries, including India.
Netflix also took Indian cinema to the global stage with three major blockbusters: “RRR (Hindi),” “Gangubai Kathiawadi,” and “Bhool Bhulaiyaa 2”. “RRR (Hindi)” made history as the longest-ever trending Indian film on the global Top 10 for non-English films, accumulating an astonishing 73 million viewing hours. Similarly, “Gangubai Kathiawadi” and “Bhool Bhulaiyaa 2” amassed impressive viewing hours of over 50 million and 21 million, respectively.
In a Nutshell
The worldwide crackdown on password sharing on Netflix has yielded positive results for the US streaming giant in terms of its number of paying streaming subscribers. During the second quarter of 2023, the company saw an addition of 5.89 million new paying subscribers, resulting in a record-high total of 238.39 million paid subscribers worldwide. This 8% YoY surge in subscribers reflects the effectiveness of the measures taken to curtail unauthorized access and ensure fairness for legitimate users.
However, despite the impressive subscriber growth, Netflix’s second-quarter revenue fell short of analyst estimates, leading to a disappointing performance on Wall Street. As a consequence, the company’s shares experienced a decline of over 5% in after-hours trading. Netflix’s global revenue in Q2 2023 increased a mere 2.72% YoY and 0.32% QoQ to $8.19 billion.
In a significant move to increase its revenue, Netflix recently discontinued its basic ad-free monthly subscription plan priced at $9.99 in the US and UK. New or rejoining members will no longer find this plan available on the company’s website. However, existing customers currently subscribed to the plan will not be affected unless they choose to change plans or cancel their subscriptions. Interestingly, the most affordable Netflix plan in the US is now the $6.99 per month ad-supported plan, which was introduced last year.
As Netflix continues to navigate the dynamic streaming industry and balance its efforts to combat password sharing with meeting financial expectations, strategic decisions and innovations will play a pivotal role in sustaining its growth and investor confidence in the long run.
Given India’s price-sensitive consumer behaviour, can Netflix strike a delicate balance between curbing unauthorized access and retaining genuine subscribers? Let us know in the comment section!