It is no secret that Indians are jugaadu. And it is with this mindset that multiple Netflix users in India use one account. Friends, friends of friends, family members — all of them use the same Netflix account yet pay for just one subscription. This, the platform believes, is one of the key reasons behind the subscriber drop for the first time in the last 10 years in 2022. Netflix hopes to gain subscribers by cracking down password sharing business in the coming days.
As per company terms and policies, Netflix doesn’t allow users to share their subscriptions with anyone outside of their homes. But, there is also no way for Netflix to find out if one subscription is shared among multiple people. It is after losing subscribers for the first time in 10 years last year that the streaming platform released the need to immediately crackdown password sharing.
No more Netflix password sharing
Last year, after losing a large chunk of the subscriber base, the streaming platform said that it would soon introduce ads to the platform. Netflix CEO Reed Hastings also said that soon the company will crack down on password sharing. As per reports, starting in 2023, Netflix will no longer allow users to share passwords with anyone outside the household. The password sharing crackdown has already begun in some markets but it is yet to reach the Indian market.
By cracking down on the password sharing business, Netflix simply wants anyone outside the household to use your Netflix subscription to pay. In simple words, if you share your Netflix password with anyone outside your house, the person will need to pay a fee to use the subscription. So, with the new process coming into effect, there will be no way one will use their friend’s Netflix profile without paying. Now, how will the platform track whether you are using someone else’s account or not? Well, Netflix will enforce the new password sharing rule through IP addresses, device IDs, and account activity.
Netflix has been testing the new password sharing option in some Latin American countries, including Costa Rica, Chile, Peru, and some more. In these markets, Netflix is charging $3 (Rs 250 approx) for people who wish to use their friend’s Netflix account. The company hasn’t yet revealed how much it will charge per usage in India, but the fee is likely to be at par with the global pricing.
Will Indians pay to use Netflix?
The question that comes to mind now is — will Indians be ready to pay for the subscription? Well, Indians are known to have a jugaad for everything and never pay for services. Netflix has been available in the Indian market for many years but couldn’t grow as much as its competitors like Disney+ Hotstar or even Amazon Prime Video. Netflix has never revealed a specific subscriber base for India but estimates place the figure to be somewhere around 5 million.
In Q3 2022, the streaming platform revealed that the ARM (Average Revenue Per Membership) dropped 3 per cent year-over-year “partially driven by lower ARM in India, and somewhat offset by higher ARM in Australia and Korea”. During the earnings call, the company also said that though ARM was low, viewership in India continued to grow.
Despite the growing streaming user base, India doesn’t shell out as much as other developed markets when it comes to OTT spending. And this mindset of getting everything for free, I believe, might not help Netflix get more customers on board, even by cracking password sharing. While I do not know what the jugaad could be this time, I do believe that if Indians had to pay to use Netflix they would have done so by now.
Netflix has been trying its best to increase its subscriber base in India. In fact, Netflix currently offers one of its cheapest plans in India, starting at Rs 149 a month, keeping the price-sensitive attitude of Indians. But even that doesn’t seem to help. In India, Netflix currently offers four plans – mobile-only plan, basic plan, standard plan, and premium plan. The mobile-only plan comes at Rs 149, while the basic, standard, and premium plans are priced at Rs 199, Rs 499, and Rs 649, respectively. It is a fact that, when compared to competitors, Netflix plans are quite expensive and that’s enough of a reason for Indians to not subscribe to the platform. Also, there are many competitors out there at a cheaper price and great content quality is to be blamed.
The streaming platform hasn’t yet revealed when the password-sharing will end in India, but when it does it will be interesting to see how Indians react to it. It will decide the fate of Netflix in India.