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One Third of Netflix Subscribers Share the Service with Non-Subscribers

Pixabay
(Image credit: Pixabay)

DURHAM—A third of all Netflix subscribers share their passwords with non-subscribers, according to a new report from Leichtman Research Group, which also revealed that 64% of Netflix subscribers stay honest, paying fully for the service and not sharing outside of their household. 

Specifically, the report showed that 15% of Netflix services are used and paid for by those that also share them with someone outside the household;  5% of Netflix services are used in one household but are borrowed from another household that is paying for the service and  3% of services are used by multiple households that share costs. An additional 3% of Netflix services are not paid for because they come with another service.

The findings are based on an online survey of 4,400 households nationwide and are part of a new LRG study, Internet-Delivered Pay-TV Services 2022.  This is LRG’s fifth annual study focused on the vMVPD category, along with other DTC streaming video services.

Overall, LRG found that 83% of U.S. households have at least one streaming video service from 15 top direct-to-consumer (DTC) and subscription video on-Demand (SVOD) services; including 67% of all households with Netflix. 

The survey revealed that 29% of all DTC services are shared with others outside the household and that 12% of all DTC services are fully paid for by someone outside the household. In addition, 34% of adults ages 18-34 have at least one DTC service that is fully paid for by someone else—compared to 14% of ages 35+.

Five percent of all households had Netflix in the past year, but currently do not— similar to 6% for Hulu, 5% for Amazon Prime, and 5% for live pay-TV services. Adults ages 18-44 account for 65% of all with a vMVPD pay-TV service. 

When it looked at vMVPDs, (YouTube TV, Hulu, Sling TV, etc.) the survey showed that nearly 80% of vMVPD subscribers said they are very satisfied with their service—compared to 76% in 2020, and 69% in 2018. Password sharing was also fairly common among these subscribers as well, with 23% of all vMVPD services shared by multiple households, including 7% of all vMVPD services that are fully paid for by someone outside the household.

The report comes amid a slowdown in the rate of subscriptions for the world’s largest streamer and provides more fodder for Netflix to justify its recent attempts to crack down on password sharing, which, if followed through, could add an estimated $1.6 billion to its bottom line annually.

“Password sharing is an inherent feature of most streaming services. Sharing helps to expand the user base and retain customers, but it also creates a gap between the number of households that have a service and actual paying subscribers,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc.  “For example, about two-thirds of U.S. households report having Netflix, but this includes about 10% of U.S. households that don’t pay for the service because it is borrowed from someone else’s subscription.”

Tom Butts
Tom Butts

Tom has covered the broadcast technology market for the past 25 years, including three years handling member communications for the National Association of Broadcasters followed by a year as editor of Video Technology News and DTV Business executive newsletters for Phillips Publishing. In 1999 he launched digitalbroadcasting.com for internet B2B portal Verticalnet. He is also a charter member of the CTA's Academy of Digital TV Pioneers. Since 2001, he has been editor-in-chief of TV Tech (www.tvtech.com), the leading source of news and information on broadcast and related media technology and is a frequent contributor and moderator to the brand’s Tech Leadership events.