Will Netflix's Tough Stance On Paid Sharing Work In India?

"A Netflix account is meant to be shared by people who live together in one household. People who are not in your household will need to sign up for their own account to watch Netflix."

Netflix said this at the start of 2023 in their Help Center section. The OTT giant hinted towards a password-sharing crackdown in the days to come. As of now, Netflix won't allow users to share passwords outside their "household" in the US and other countries without paying up first.  

This comes even as users across the globe were sharing one account with multiple family members and friends.  Netflix said on May 23, "Starting today, we will be sending this email to members who are sharing Netflix outside their household in the United States." 

The streaming giant initiated the distribution of emails to customers in 103 countries and territories, including prominent markets like the United Kingdom, France, Germany, Australia, Singapore, Mexico, and Brazil.

Why is Netflix introducing new password-sharing rules? How will it impact users?

According to Netflix, 2022 was a rather bumpy year for the platform. Paid sharing was introduced to reaccelerate revenue growth and build on the platform's advertisement offerings. 

Number of Netflix paid subscribers worldwide for the four quarters in FY 2022-23

In the US and select other countries, Netflix will charge people for sharing Netflix with someone who doesn't live with them. People who do not live in the "household" will need to use their own account to watch Netflix. 

A single account can be accessed by people living in one household. Information such as IP addresses, device IDs, and account activity to keep track of all devices signed into one account. 

If you travel with your main device, you shouldn't have any issues logging in when you're in a different location. However, if you spend a lot of time away from your home, you might sometimes be asked to verify your device.

Currently in the US, if you want to use an account on multiple devices, two plans are available. The ‘Standard' and the ‘Premium' plan allow you to add extra member slots at $7.99 each/month. While the extra members have their own account and password, their membership will be paid for by the person who invited them to share their Netflix account. 

In the United Kingdom, Netflix will charge £4.99/month for each extra member added by subscribers.

The Initial and Later Impact

Netflix expects a cancel reaction initially after the paid sharing is rolled out. This will obviously impact the near-term member growth. However, it believes that password borrowers will soon begin to get their own subscription/ standalone accounts. This could drive over revenue. 

Netflix is already one of the more expensive streaming platforms in India. Given the country has seen many others bring quality content for cheaper prices, will this work? 

Netflix has a huge subscriber base in India, but not everyone is keen on remaining one once similar pricing or rules are launched. The Core spoke to multiple Netflix users who share accounts outside of the "household" to see if they would like to become paid subscribers. The responses were mixed.  

Gitanjali Saini, a 25-year-old software engineer in Gurgaon, watches Netflix almost every day. Yet, without hesitation, she said that taking a subscription doesn't make sense as there are several other options. Uttarakhand resident Vijay Madwal, 23, too had a similar response. "I wouldn't continue watching Netflix by paying such high prices if a similar policy is launched in India. There are other websites and apps available, that are free to use. However, I don't think Netflix would introduce this in the Indian market."

Thirty-five-year-old Adity Sen, who works in Hyderabad also plans to watch content on other OTT platforms, rather than paying an additional charge. "I use my best friend's account. In India, this is how it goes for all multi-user OTT platforms. One user pays for one app and the other friend can take a subscription for another platform. Since these platforms are quite expensive, if they are shared it becomes easier, and one gets more variety. They will watch something on Netflix, something on Amazon," she said. 

Even though there would be people who would choose to opt-out, the loyal audience that Netflix has developed over the years, owing to its quality content, cannot be overlooked. 

Akhila, 36, who works in public relations,  is currently using one subscription for her family in Mumbai but she doesn't mind paying the additional charge for an added member if required. Why? Because that's the platform her family uses the most. She said, "I have never shared passwords in the first place, so as an individual user it wouldn't make much of a difference." 

Twenty-seven-year-old Stuti Chopra, who lives in Lucknow, believes that Netflix certainly has better quality content that she would also like her parents to watch. This is why, even though she isn't paying for an account currently, she wouldn't mind if that was the only option. 

"Though there are other ways available to access any content, I don't think our parents are enough tech savvy yet to learn alternate ways that most would move to if paid sharing is rolled out," she added. 

India isn't affected by the new policy yet, but it would be interesting to see how it pans out. Would password borrowers fall in line and get ready to pay more?