Netflix’s password sharing curbs could lift its subscriber base in India

According to industry estimates, Netflix’s paid base in India hovers between 8 million and 10 million.

In a letter to shareholders, Netflix said it will start to address account sharing between households in almost all the remaining countries, including India.

The platform will not be offering an extra member option in India since it cut pricing in the country in December 2021.

Netflix declared that it added almost 6 million paid net additions for the three months that ended June after the platform clamped down on password sharing beginning May in over 100 countries, which represented more than 80% of its revenue base.

“This is a good move to shore up subscriptions in India. Netflix will surely gain subscriptions even though they might lose some shared access viewers in the short run,” said Uday Sodhi, senior partner, Kurate Digital Consulting, a digital transformation and strategy consulting firm.A senior media analyst said on condition of anonymity that password sharing and piracy are rampant in the Indian market. The analyst expects Netflix to gain incremental subscribers due to restrictions on password sharing.”There is a gap between their active user base and their actual paid base, which means that there is a lot of password sharing and piracy. It’s early days to make a prediction, but the clampdown on password sharing will help them get incremental subscribers in India,” he added.

Elara Capital SVP Karan Taurani said the crackdown will have a positive impact on Netflix’s subscriber base, but the quantum of the positive impact may not be as high as in mature markets globally since India is a price-sensitive market.

“If you have two or three families that are sharing a password, you will see instances where some customers might go for fresh subscription, but because the market is price sensitive, you might also see instances where the customer unsubscribes from the platform and eventually resorts to watching content on pirated platforms,” he added.

NV Capital managing partner Nitin Menon said Netflix faces the twin challenges of password sharing and piracy since its subscription plans are very expensive for an average Indian consumer. He feels that the platform needs to revisit its pricing strategy in India.

“Netflix needs to be more flexible with its pricing strategy since India is a price-sensitive market. Their subscription plans have always been priced at a premium compared to other OTT platforms,” he added.

Starting July 20, the streaming platform said that a Netflix account can only be used by one household, and everyone living in that household can consume content wherever they are. It stated that family members can also take advantage of new features like Transfer Profile and Manage Access and Devices.

Netflix’s paid member base in India increased in 2022 as the price of its monthly plans was reduced. The platform decreased the cost of its mobile plan from Rs 199 to Rs 149.

Netflix’s basic plan was decreased from Rs 499 to Rs 199, while the standard plan was reduced from Rs 649 to Rs 499. The premium plan’s price has been reduced from Rs 799 to Rs 649.

In an earlier interaction with ET, Netflix India VP for content Monika Shergill said that the platform has seen a 30% growth in content consumption, while its revenue grew 25% year over year.

According to Netflix Entertainment Services India’s financial data, sourced by Tofler, the company ended FY21 with gross revenues of Rs 1,529.36 crore.