Netflix says more than 100M households sharing passwords
Netflix lost subscribers globally in the first quarter
Netflix said more than 100 million households are using a shared password.
In its quarterly letter to shareholders, the streaming giant said the tally includes over 30 million in the U.S. and Canada.
NETFLIX LOSES SUBSCRIBERS AMID GROWING COMPETITION, ACCOUNT SHARING
Netflix has 222 million paid subscribers.
"Account sharing as a percentage of our paying membership hasn’t changed much over the years, but, coupled with the first factor, means it’s harder to grow membership in many markets – an issue that was obscured by our COVID growth," Netflix said.
The shares fell on Wednesday heading for the worst day on record.
Netflix acknowledged that "high household penetration," including the households sharing accounts, combined with competition is "creating revenue growth headwinds."
Those who don't pay for Netflix, the company said, represent "huge future growth potential."
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In order to "reaccelerate" viewing and revenue growth, Netflix said it would focus on how best to monetize sharing.
"There’s a broad range of engagement when it comes to sharing households from high to occasional viewing," it said. "So while we won’t be able to monetize all of it right now, we believe it’s a large short- to mid-term opportunity. As we work to monetize sharing, growth in ARM, revenue and viewing will become more important indicators of our success than membership growth."
Netflix ended the first quarter with 200,000 fewer subscribers than it had in the fourth quarter, missing on its own projection of adding 2.5 million customers in the period. The streaming service said it expected to lose 2 million global subscribers in the second quarter.
CEO Reed Hastings said in the company’s first-quarter earnings interview that after years of insisting it would stick solely to subscription-only plans, Netflix is open to experimenting with lower-cost, ad-supported packages.
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"Those that have followed Netflix know that I’ve been against the complexity of advertising and a big fan of the simplicity of subscription," he said. "But as much as I’m a fan of that, I’m a bigger fan of consumer choice. And allowing consumers who would like to have a lower price and are advertising-tolerant [to] get what they want, makes a lot of sense."