More password sharing crackdowns are inevitable

Netflix's assault on password sharing is now in full swing, and it's a safe bet that we'll see other streamers follow suit.

The streaming giant this week greatly expanded the scope of its password sharing crackdown, targeting Australia, the United States, and the United Kingdom. Netflix doesn't want anyone outside of your physical household using your account. Well, unless you pay extra.

As the industry pioneer, there have been plenty of instances where the streaming market has followed Netflix, and it feels like there won't be any exceptions when it comes to password sharing.

No other streaming service has started cracking down on password sharing yet, but if Netflix pulls it off, it's a logical next step. 

Netflix is pretty confident cracking down on freeloaders is good for business. In fact, it's one of its key initiatives for driving growth. In Netflix's most recent shareholder update, Netflix said that there is a "cancel reaction" in each market when it announces a password sharing crackdown, but that subscribers and revenue grow in the long run.

And obviously, growth is Netflix's goal. Growth keeps the market happy, and Netflix's share price high. Cracking down on password sharing isn't a particularly clever tactic for driving extra revenue (in contrast with creating higher quality content, for example), but it seems to be working.

Short of the new offensive on password sharing going horribly wrong, it's very easy to see the rest of the streaming industry taking Netflix's lead.

Disney Plus lost four million subscribers (globally) in the first three months of the year. Binge is perpetually at risk of HBO launching its own streaming service in Australia and taking the rights to its shows with it. Stan has seen key partners like Disney and Paramount launch their own streaming services in Australia while pulling their content at the same time.

(As a side note, Amazon Prime Video and Apple TV Plus seem the least likely to crack down on password sharing, given streaming isn't the business model, but a value add.)

Given the messy state of streaming, why would a company leave money on the table? If overall growth outweighs any gut-reaction cancellations, password sharing crackdowns are a no-brainer - even if they suck for subscribers.

Alex Choros

Managing Editor + Group Telco Editor | X | Instagram | Threads | LinkedIn

Alex Choros is the Managing Editor of WhistleOut Australia and an award-winning journalist. He's been writing about consumer technology for over a decade and is an expert on the Australian telco sector, to the point where he knows far too many phone and internet plans by heart. In addition to leading the WhistleOut editorial team, Alex is responsible for ruining the office Sonos with his troubled taste in music.

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