Netflix’s decision to crack down on password sharing in India has the potential to boost the streaming giant’s subscriber base in the country, despite a potential short-term drop in shared access viewers, according to media analysts.
Industry estimates suggest that Netflix’s paid base in India stands at around 8 million to 10 million subscribers.
In a letter to shareholders, Netflix announced its intention to address account sharing between households in almost all remaining countries, including India.
Due to a reduction in pricing in December 2021, Netflix will not be offering an extra member option in India.
Netflix reported adding almost 6 million paid net additions for the three months ending June, following the implementation of measures to curb password sharing in over 100 countries. This represented over 80% of its revenue base.
“This move is a smart strategy to increase subscriptions in India. Although there may be a temporary loss of shared access viewers, Netflix is likely to gain subscriptions in the long run,” said Uday Sodhi, senior partner at Kurate Digital Consulting, a firm specializing in digital transformation and strategy consulting.
An anonymous senior media analyst highlighted the prevalence of password sharing and piracy in the Indian market. The analyst predicts that Netflix will attract additional subscribers as a result of the restrictions on password sharing.
“There is a discrepancy between the active user base and the actual paid base, indicating a significant amount of password sharing and piracy. It’s still early to make a definitive prediction, but the crackdown on password sharing will undoubtedly drive incremental subscriptions in India,” the analyst added.
Karan Taurani, SVP at Elara Capital, believes that the crackdown will have a positive impact on Netflix’s subscriber base in India. However, he suggests that the impact may not be as substantial as in mature markets due to India’s price-sensitive nature.
“While some customers may opt for fresh subscriptions if multiple households are sharing a password, others may unsubscribe from the platform and resort to watching content on pirated platforms, given the price sensitivity of the Indian market,” Taurani explained.
Nitin Menon, managing partner at NV Capital, highlighted the dual challenges faced by Netflix in India—password sharing and piracy, coupled with expensive subscription plans. He believes that Netflix needs to reconsider its pricing strategy to cater to the price-sensitive Indian market.
Starting July 20, Netflix implemented a policy whereby a single Netflix account can only be used by one household, with all members of that household having access to content wherever they are. The platform also introduced new features such as Transfer Profile and Manage Access and Devices.
Netflix’s paid member base in India saw a boost in 2022 following a price reduction in its monthly plans. The cost of the mobile plan was decreased from Rs 199 to Rs 149, the basic plan from Rs 499 to Rs 199, the standard plan from Rs 649 to Rs 499, and the premium plan from Rs 799 to Rs 649.
In a previous interview, Monika Shergill, Netflix India’s VP for content, shared that the platform experienced a 30% growth in content consumption and a 25% year-over-year revenue increase.
According to financial data from Netflix Entertainment Services India, obtained from Tofler, the company generated gross revenues of Rs 1,529.36 crore in FY21.
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Basant Kasayap is an entertainment aficionado who delves into the glitz and glamour of the entertainment industry. From Hollywood to Bollywood to regional cinema, she offers readers an insider’s perspective on the world of movies, music, and pop culture.
