Netflix Password Sharing Ban Backfires: 200,000+ Users in Australia Left the Platform

As streaming giants continue to evolve their business models, Netflix's recent decision to clamp down on password sharing has sent shockwaves through the Australian market.
In a development that should be of concern to the streaming giant, Forbes reports that roughly 200,000 Australian users have abandoned Netflix, seeking refuge in alternative streaming services.

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netflix password sharing

Illustration: L. T.

A recent report from Forbes highlights that Australians are pushing back against Netflix’s stringent restrictions on password sharing. 

A study conducted by Telsyte revealed that a staggering 1 in 3 Australian subscription video-on-demand subscribers share their service with friends and family. 

What’s more, it seems that Netflix’s new rules have led 7% of new subscribers who signed up in the past year to cancel their Netflix subscriptions. 

Pushback on password sharing 

One notable aspect of this pushback is the resistance to Netflix’s new ad-supported model. As concerns about the rising cost of living loom large, users are expressing their discomfort with potential fee increases. 

Nevertheless, most video-on-demand consumers have come to terms with the idea that streaming costs may rise in parallel with their living expenses. 

According to Telsyte, this could signify a willingness to accept price hikes. In fact, half of those surveyed considered subscription services “vital” to their entertainment needs and were willing to allocate an average of $36 per month to streaming services. 

However, because of the Netflix’s strict policy, users have started to look for video on demand services elsewhere. 

video on demand

Source: Forbes

Although the survey was conducted in Australia, we are witnessing this scenario all over the world since no one is particularly happy about the password sharing ban that Netflix has introduced. 

Why is password sharing such a problem?   

In a world where streaming has become the norm for accessing entertainment, recent developments in the streaming landscape have sparked discussions far beyond Australian borders. 

Netflix’s attempts to curtail password sharing have raised questions about the very nature of how we consume content, with millions around the globe opting for a more practical, convenient, and sustainable approach. 

From Netflix’s point of view – okay, they are losing profit to some extent. But is there really no way that password sharing could serve their benefit as well? 

That is, prices have gone up, the competition has widened, consumer habits have changed – maybe they should rethink the platform’s approach as well and come up with a solution that would satisfy both parties. 

Rethinking password sharing 

According to data obtained by CBNC, more than 100 million households share accounts – about 43% of its global user base – affecting Netflix’s ability to invest in new content. 

On the other hand, sharing passwords for streaming platforms has long been a common practice, and it’s not hard to see why. People have busy lives and don’t necessarily have the time to watch content all day, every day.  

Instead, they opt for a more communal approach, sharing their subscriptions with friends and family. This practice not only promotes social engagement but also fosters sustainability by reducing the number of individual subscriptions. 

A sustainable future of streaming platforms 

In the grand scheme of things, the issue of password sharing raises broader questions about the sustainability of the streaming industry. 

As living expenses rise, many are willing to allocate a portion of their budget to streaming services, acknowledging their importance in meeting entertainment needs. The challenge for streaming platforms is to strike a balance between protecting their revenue streams and acknowledging the practicality and sustainability of password sharing in an ever-evolving digital landscape. 

What’s more, today it has become necessary to be subscribed to more than one platform since most shows are distributed directly on certain platforms. In the long run, users will start to cancel subscriptions or – you guessed it – start sharing passwords; it’s a logical order of events. 

In this context, password sharing can be viewed as a natural response to an industry that has yet to find a universally affordable solution for consumers. 

A journalist by day and a podcaster by night. She's not writing to impress but to be understood.