Netflix ends password sharing in India and other markets

Netflix’s revenue for the second quarter of 2023 stands at USD 8.2 billion, up by 2.7 % since the second quarter of 2022. The company also announced that it's ending password sharing in India and other markets like Kenya, Indonesia and Croatia after testing it out in countries like US and Canada.

"Starting today, we will be sending this email to members who are sharing Netflix outside their household in India. A Netflix account is for use by one household. Everyone living in that household can use Netflix wherever they are — at home, on the go, on holiday — and take advantage of new features like Transfer Profile and Manage Access and Devices. We recognise that our members have many entertainment choices. It is why we continue to invest heavily in a wide variety of new films and TV shows — so whatever your taste, mood or language and whoever you are watching with, there is always something satisfying to watch on Netflix," said the company. 

According to Netflix’s financial report for Q2 for 2023, released on Thursday, it has gained 5.89 million subscribers in Q2, taking the total number of global streaming paid subscribers to 238.39 million. In Q1, Netflix had added 1.75 million paid subscribers.

“Q2 ‘23 revenue of $8.2B and operating profit of $1.8B were generally in-line with our forecast—and we expect revenue growth to accelerate in the second half of ‘23 as we start to see the full benefits of paid sharing plus continued steady growth in our ad-supported plan. We’re still targeting a full year 2023 operating margin of 18% to 20%,” the report said.

The report said that the revenue growth was driven by a 6% increase in average paid membership, while average revenue per membership (ARM) declined 3% year over year.

“The year-over-year ARM decline was driven by a combination of limited price increases over the past 12 months (leading up to the launch of paid sharing), timing of paid net additions (primarily late in the quarter due to the May 23 rollout of paid sharing in Q2), and a higher mix of membership growth from lower ARM countries,” Netflix said in a statement.

Netflix said that tackling account sharing between households has been another focus as it “undermines our ability to invest to improve Netflix for our paying members and grow our business.”

“In May, we expanded paid sharing to 100+ countries, which account for over 80% of our revenue. The cancel reaction was low and while we’re still in the early stages of monetization, we’re seeing healthy conversion of borrower households into full paying Netflix memberships as well as the uptake of our extra member feature,” it said.

Netflix said that now it will address account sharing between households in the remaining countries and the households borrowing Netflix, and will be able to transfer existing profiles to new and existing accounts.

In these markets, we’re not offering an extra member option given that we’ve recently cut prices in a good number of these countries (for example, Indonesia, Croatia, Kenya, and India) and penetration is still relatively low in many of them so we have plenty of runway without creating additional complexity. Households borrowing Netflix will be able to transfer existing profiles to new and existing accounts,” the statement said.