Netflix’s Password Crackdown Boosts US Audience, But Australians Are Cancelling

Netflix increased its US subscriber base after its global clampdown on password sharing. But in Australia, it's in decline.

Netflix’s crackdown on password sharing that kicked off in May has led to a boom in subscribers in the US – but in Australia, users have left the platform in droves.

While Netflix added well over two and a half million US subscribers to the platform during June, new data has revealed that the service is experiencing a decline in Australia for the first time, with users heading to other sites for on-demand video content.

Netflix: American’s Flock While Aussies Flee

According to data from Antenna, 2.6 million new US users signed up to Netflix in the month of July, exceeding expectations after the company’s password crackdown in May.

In Australia, after users were asked to pay an extra fee every month or relinquish the ability to share their password outside of their household, things went quite differently.

According to Telsyte, 7 percent of those who subscribed to Netflix in the last year have canceled their subscription due to the new rules. This led to Netflix’s subscriber base dropping for the first time ever in June.

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Among streaming services, the decline seems isolated too – Netflix is the only major streaming service charting a decline in users in Australia. The market is still strong, with 6.1 million subscriptions paid for in a country with just over 25 million people.

Smaller services like Paramount+ and Binge have thrived – according to Telsyte, both of which have 1.5 million subscribers – experienced 41% and 22% increases respectively.

Why Did Netflix Crack Down on Passwords?

In May 2023, Netflix enforced a password crackdown in more than 100 countries, including the United States. This involved informing users via email that their accounts could not be used for free outside of their own households.

The main motivation behind the change is of course money, with the streaming giant looking for different ways to increase revenues as it jostles for position in a streaming market that’s already competitive and only going to get busier.

The competition Netflix faced when it first started life back in 2007 pales in comparison to 2023, with the likes of Amazon Prime Video now hot on the pioneer’s heels, as are the likes of Paramount+ and a string of sports-focused streaming services like DAZN.

Right now, you can still add someone outside of your own household to your Netflix account, but this costs $8 per user, per month in the US, and $7.99 AUD in Australia.

The company estimated prior to enforcing the May crackdown that more than 100 million subscribing households had shared their password for the streaming service with individuals outside of their households. Disney+ plans to enforce a similar clampdown on password sharing soon.

Is it Possible to Avoid Netflix’s Password Crackdown?

Netflix uses a number of different indicators to dictate whether a password is being used outside of the household. This includes IP addresses, device IDs, and “account activity from devices signed into the Netflix account” to determine whether it’s being used within the rules.

Technically, password sharing is a crime, and it’s been that way since 2016. As of 2023, however, no one has ever been prosecuted for doing this.

Online, some users have been advising one another to use NordVPN’s meshnet feature – which is available to all NordVPN account holders – to skirt around the new password-sharing rules.

In a nutshell, Meshnet allows users to connect to a single IP address, which makes it hard to tell they’re in different parts of the world. Its primary use case is gaming. Of course, you’ll need to purchase a NordVPN subscription in order to do this, so it’s not a completely free workaround.

Although Netflix doesn’t exactly have a history of hauling users who violate their terms of service through court, a password crackdown hasn’t been enforced before – so we’d advise against it. However, it’s much more likely that Netflix will simply enforce tighter restrictions or ban users that violate their ToS than demand mass arrests.

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Written by:
Aaron Drapkin is Tech.co's Content Manager. He has been researching and writing about technology, politics, and society in print and online publications since graduating with a Philosophy degree from the University of Bristol six years ago. Aaron's focus areas include VPNs, cybersecurity, AI and project management software. He has been quoted in the Daily Mirror, Daily Express, The Daily Mail, Computer Weekly, Cybernews, Lifewire, HR News and the Silicon Republic speaking on various privacy and cybersecurity issues, and has articles published in Wired, Vice, Metro, ProPrivacy, The Week, and Politics.co.uk covering a wide range of topics.
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