Netflix Loses Upwards Of £1.2 Billion Annually On Password Sharing
You might see it as a positive thing - sharing's caring and all that malarkey - but in reality, sharing your Netflix password with others could be losing the streaming service around $1.62 billion (£1.25bn) each and every year.
Following a study which was released in December by analytics company Magid, it was discovered that 9 percent of Netflix customers are believed to be distributing their passwords.
This might not seem like a hefty number until you find out they have an incredible 137 million customers - meaning that 9 percent is actually 12.3 million people who are password sharing with (at least) one person.
Assuming they are sharing their password with just one other, that's 12.3 million people not paying the subscription fee of $12.99 a month (US price for the standard plan) which is over $122m in missed earnings. That's just each month.
Times that number by the 12 months in a year and you've got a hefty sum of $1.59bn, so it's no wonder the brains behind Netflix are trying to come up with ways to address password sharing without 'alienating a certain portion of [its] user base'.
Speaking at Netflix's Q3 2019 earnings interview, chief product officer Greg Peters, said: "We continue to monitor it so we're looking at the situation. We'll see those consumer-friendly ways to push on the edges of that."
According to The Independent, when users share passwords, they are essentially sharing a single Netflix account, which naturally circumvents Netflix's business model, according to which each household needs to have its own account.
Users are already able to share accounts by setting up several viewing profiles on a single login (you're welcome, guys) but password sharing ramps it up a notch.
According to Magid - a consumer-centred business strategy and custom research company - the password sharing problem might be a 'generational issue'.
The suggested that overall it may be only nine percent of customers are sharing passwords but 35 percent of millennials share passwords for streaming services - this is more than Generation X (19 percent) and Baby Boomers (13 percent) together.
Not only is Netflix missing out on money but you're actually opening yourself up to the possibility of fraudulent activity.
Magid reports that sharing passwords is a risk to cyber-security that could even potentially result in identity theft via their other accounts. This is because many people use the same password across accounts.
This means that if some random has your password because you kindly gave it your mate over the phone one Sunday afternoon - chances are they've got the credentials to access your online banking if you use the same password.
*Changes password for everything*
Featured Image Credit: PA