Netflix to crack down on account-sharing, says 100M households don’t pay

polygon.com:

In an earnings letter to shareholders on Tuesday, Netflix said that it estimates that over 100 million households are viewing the service without paying for it, by sharing accounts with households that do.

In March, the streaming company said that it would be testing a new feature in Costa Rica, Chile, and Peru that detected account sharing and allowed for the creation of cheaper sub-accounts. This led many to suppose a wider crackdown on account sharing was coming. Netflix’s shareholder statement confirmed this as a focus for the company over the next year, and as justification set out the huge scale of the account sharing practice.

“In addition to our 222m paying households, we estimate that Netflix is being shared with over 100m additional households, including over 30m in [the U.S. and Canada],” the company said. That would mean that nearly a third of households that use Netflix aren’t paying for it.

Netflix explained to its shareholders that the big boost to its subscriber numbers during the pandemic had obscured the fact that it was facing a number of challenges in expanding its enormous audience any further — including things like increased competition in streamed entertainment, take-up of connected TVs, and data costs. These factors were behind its recent slowed growth. In the meantime, to grow is revenues, it would look to find ways to monetize the vast number of households that weren’t currently paying for the service.

In relatively friendly language that seemed aimed at customers as much as shareholders, Netflix said:

Another focus is how best to monetize sharing — the 100M+ households using another household’s account. This is a big opportunity as these households are already watching Netflix and enjoying our