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Netflix Spain faces massive saetback as One Million users turn away – reports Kantar

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Netflix faces backlash in Spain over Password Sharing Crackdown, loses one million users

The Spanish market research group Kantar has reported that Netflix experienced a significant loss of over one million users in Spain during the first quarter of 2023. This could indicate that the streaming giant’s recent efforts to combat password sharing may be met with resistance from consumers. Netflix’s initiative, which began in February, involved implementing a €5.99 ($6.57) monthly fee for users in Spain who shared their login information with other households, as well as utilizing technical measures to identify such sharing. According to Kantar’s research, which involved conducting surveys on household streaming behaviors, the decline in Netflix’s user base can be attributed to over two-thirds of users utilizing someone else’s password.

What caused the decline in subscriptions?

Dominic Sunnebo, the Global Insight Director at Kantar’s Worldpanel Division, suggests that the recent decline in Netflix’s subscriber count is directly linked to the new crackdown. Though most of the lost subscribers were likely non-paying customers, their departure will still hurt Netflix’s word-of-mouth recommendations and overall reputation.

Research conducted by Kantar reveals that subscription cancellations during the first quarter of the year have tripled in comparison to the previous period. In Spain, one in ten of Netflix’s remaining subscribers have confirmed that they plan to cancel their subscription during the second quarter of the year.

Netflix has implemented a similar pricing strategy in various countries such as Portugal, Canada, and New Zealand, following a successful launch in various Latin American nations.

What Netflix likes to believe:

According to Netflix’s first-quarter earnings release on April 18, the company noted a temporary dip in each market when announcing the news. However, they anticipate a subsequent uptick in new user sign-ups once those who have been sharing accounts start paying for their own. Notably, in Canada, which they view as a reliable indicator for the US market, Netflix’s paid membership base has exceeded pre-paid sharing launch levels, resulting in accelerated revenue growth that is outpacing that of the US.

Netflix has reported that over 100 million individuals worldwide use an account that is not paid for, although the company does not provide a breakdown of this figure by country. To identify password sharing, the company utilizes a range of methods such as monitoring IP addresses, device identifications, and account activity to identify if a user is signed in from their primary residence.

While Netflix missed its new subscriber projections for the first quarter, the company is optimistic that its plan to enforce password sharing and introduce a cheaper ad-supported streaming option will stimulate growth in the latter half of 2023.

Netflix’s investment in producing Spanish-language content appears to be yielding favorable results. In Spain, two out of the top five most viewed series in the first quarter of 2023 were available for streaming on the platform, as per data from Kantar. The company’s commitment to Spanish-language programming is evident in its opening of the first European production hub in Madrid in 2019, which expanded in size by 100% by the close of 2022.

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