Netflix estimates that a huge amount of people watch the service thanks to account sharing
Netflix announced in March that it plans to crack down on password sharing, and in its first quarter earnings letter to shareholders (pdf), it gave a big clue as to why.
Netflix has 222 million “paying households,” but it estimates the service is shared with over 100 million “additional households,” 30 million of which are in the US and Canada. That indicates there is a massive swath of people who aren’t paying Netflix directly for the ability to stream their favorite shows.
Right now, the company is testing a new feature in Chile, Costa Rica, and Peru where subscribers can add “sub accounts” for up to two people outside of their home at reduced prices. It’s unclear when the test might be expanded to more countries, but given how many people who watch Netflix could be paying but aren’t, it seems likely that Netflix wants to roll it out more broadly sooner than later.
Netflix also revealed Tuesday that it lost subscribers for the first time in a decade last quarter.
