Netflix password sharing crackdown paying off in US, 10% still share

New data from Leichtman Research Group shows that password sharing continues to be an issue for direct-to-consumer services, but efforts by Netflix to implement paid sharing appear to be paying off in the U.S.

According to LRG’s Internet-Delivered TV Services 2024 study, 10% of U.S. adults with Netflix borrow the service from someone else. While still a sizable percentage, it’s an improvement from the 15% that shared the service in 2022, prior to Netflix’s password sharing crackdown, as well as the 14% that shared in 2020 and 16% who borrowed Netflix in 2018, per LRG.

Prior to rolling out paid sharing Netflix in 2022 estimated around 100 million users globally (including 30 million in the U.S. and Canada) were accessing the service without paying for their own account.  Since cracking down in May 2023, Netflix has marked success with subscriber growth, and indicated a gradual ramp for business benefits from paid sharing.

LRG found the large majority (73%) of all DTC services are fully paid for and not shared with other users outside of single household.  However, nearly a quarter (23%) of DTC services are used in more than one household – of which 11% are used and paid for by those that also share with another household, while 10% are used in a household that’s borrowing from another that’s paying for the service, and just 2% are used by multiple households that share costs.

Perhaps unsurprisingly, younger people ages 18-34 account for a greater proportion of those borrowing other people’s accounts.  Among that age group, 17% of all DTC services are fully paid for by another person, compared to just 7% of DTC services being paid for by someone else among people ages 35 and up.  Per LRG, the 18-34-year-old demo accounts for just under 60% of all DTC services that are borrowed by adults.

Since Netflix’s successful password sharing crackdown, other major streamers have started or plan to follow with implementations of their own. That includes Disney, which earlier this year started informing subscribers of Disney+ and Hulu of new subscriber agreement terms including limiting account sharing outside of households.  Warner Bros. Discovery has also said password sharing crackdowns for the Max SVOD service will start in later this year and into 2025, with WBD CEO of Global Streaming and Games JB Perrette pointing to Netflix’s positive results.

Speaking at an investor conference earlier this month, Perrette acknowledged being conscious of not overselling the size of opportunity from a password sharing crackdown at this stage, noting it SVOD has fewer years in the market and a domestic subscriber base of 52 million that’s smaller relative to Netflix. That said, he commented on password sharing crackdown that, “relative to the scale of our business, it’s a meaningful opportunity.”

And SVODs aren’t the only ones dealing with password sharing issues. LRG’s study found 22% of all virtual MVPD services – such as YouTube TV, Hulu + Live TV, Fubo and Sling TV – are shared by multiple households, including 8% of all vMVPD services that are fully paid by someone outside the household using an account.

While recent survey data from Horowitz Research showed consumers are concerned over password sharing crackdowns, the biggest streamers appear to be better insulated from cancelations as a result. In the study, around 50% of respondents who borrow logins or share costs for the top six SVODs said they would be willing to pay full price for the service if they weren’t able to share.  Rising streaming costs and subscription fatigue are factors for consumers as they manage multiple services. 

According to LRG, 88% of U.S. households have at least one streaming video service from the top 15 SVOD and DTC services, while 53% of households have four or more DTC streaming services.

“Password sharing continues to be prevalent throughout the streaming video industry, despite recent efforts to limit it.  This study found that 10% of all DTC services are borrowed from someone else, down from 12% in 2022,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, in a statement. “Overall, 20% of households have at least one DTC service that is paid for by another household.”