March 17, 2021
As the global subscription streaming VOD market becomes saturated, with fewer new subscribers, Netflix put an exclamation on the situation by initiating stricter controls on password sharing.
“If you don’t live with the owner of this account, you need your own account to keep watching,” read the message to users.
The move was noteworthy since the SVOD pioneer, until recently, had been indifferent to the issue — contending password sharing was a form of brand marketing.
Now it’s costing SVOD platforms big money. Around $300 million alone in lost 2020 revenue. New data from Swedish research group Mediavision found that 40% of (largely Netflix) SVOD subscribers in the Nordics (Sweden, Finland, Iceland, Norway and Denmark) admit to sharing a password to a standalone SVOD service with someone outside the household. Shared passwords are especially common among the younger users, with sharing up to 60% among subs under the age of 24.
“If all Nordic households sharing a SVOD service instead were to pay, approximately an additional EUR 250 million would have been added to total revenue for the full year 2020,” read the report.
Mediavision contends that password sharing has helped grow the SVOD market since consumer cost of entry remains relatively low.
“It could well be argued that sharing has been one of the reasons for the very quick transformation of the market by (unintentionally) enabling additional potential subscribers ease of access, and thereby increasing awareness,” read the report. “So far this seems to have served [the SVOD services] very well. But the times they are a changing.”