Research: Netflix password-sharing ban may cause UK churn
June 30, 2023
A month on from Netflix’s password-sharing crackdown, a quarter of UK subscribers (27 per cent) are looking to cancel the streaming service or downgrade their package, according to comparison site Broadband Genie.
About 2.5 million subscribers say they are eyeing the exit door since Netflix announced its controversial change, which means account holders can no longer share access with family or friends outside their household. Meanwhile, about 1.5 million are considering moving to a cheaper membership tier as a result of the ban.
For viewers who had been piggybacking on another’s account — estimated to be a quarter of Netflix’s 15 million UK subscribers — a quarter (25 per cent) say they feel betrayed by the company’s decision. Young people were the most angered by the move, with nearly a third of 16-24-year-olds (30 per cent), the age group that watches Netflix the most, admitting they felt let down.
Another quarter of Netflix viewers (27 per cent) who had been using the platform for free say they cannot afford to pay for a subscription of their own. Two in five (39 per cent) admit they will try to find a way around the ban. This includes using a virtual private network (VPN) to pose as another account holder and using pirate websites to watch Netflix’s TV shows and films.
Worryingly for Netflix, well over half of UK users said the new restrictions on password sharing would have a direct impact on their plans. As the platform battles for subscribers with rivals such as Disney+ and Amazon Prime, it will also be concerned that one in four Brits (27 per cent) saw cost as the biggest drawback of having more than one streaming service.
Despite the gloomy outlook, Netflix has recently enjoyed a spike in new subscriptions in America since tightening its rules.
In the UK, a third of non-account holders (35 per cent) said they would be likely to pay for a Netflix subscription, equivalent to 1.3 million new customers. Broken down across the platform’s four monthly packages — which cost between £4.99 (€5.80) and £15.99 a month — this would add £140 million a year to the company’s coffers. Netflix has recently axed its Basic subscription tier in Canada, which may mean the £6.99-a-month UK package, currently the cheapest way to view the platform without ads, could be at risk.
Meanwhile, 15 per cent of current subscribers say they are prepared to pay the extra £4.99 charge to continue sharing their account with other users, which would add another £134 million.
Streaming platforms will be affected by new laws proposed by the Government to help protect Brits from ‘subscription traps’ — where consumers take out services and forget about them, or find them hard to cancel. It plans to force services like Netflix to notify account holders every six months about an ongoing subscription and give viewers a two-week cooling-off period to cancel a new streaming package.
Broadband Genie is urging all consumers to do a ‘streaming stocktake’ of their subscriptions and investigate ways to save by tailoring their package to their usage, taking advantage of free trials and bundling streaming with other pay-TV services.
“By moving against the millions of viewers streaming its content for free, Netflix has taken a calculated gamble on its long-term future,” suggests Alex Tofts, broadband expert at Broadband Genie. “Getting a decent chunk of this group to pay for content would be a boost to its bottom line, yet a month in the strategy has left plenty of valuable customers shaken up too.”
“In Spain, subscriber numbers have plummeted following the rule change, while in America, they have increased. For now, streaming rivals will be watching with interest from the sidelines but — as the Disney+ announcement of an ad-supported tier demonstrates — where Netflix leads, others will follow.”
“If you are a Netflix viewer who has lost access to a friend or family member’s account, try taking out a free trial with another service like Amazon Prime Video or Apple TV+. This is a good way to get your film and TV fix while you consider your viewing options.”
“Meanwhile, if you subscribe to any streaming package, do a stocktake to ensure you are never paying over the odds for content or signed on for platforms you’re not using. You can also save money by bundling streaming services in with your broadband, TV and mobile packages, which could be cheaper than having separate subscriptions.”
“Remember that most services have a range of subscription levels. A package that allows you to watch on multiple devices — or stream in UltraHD — could be a waste of over £100 a year if you are typically viewing on an old TV in your living room.”
“If you want to try a variety of services, take advantage of monthly rolling subscriptions to regularly chop and change platforms and tactically binge-watch rather than paying for multiple deals at once. And for film fans, websites like JustWatch will show you the cheapest place to stream any movie.”