Prove it It's Free
Policy Updates

Netflix Spent Six Years Telling Customers Love Is Sharing a Password. Once It Started Charging $7.99 a Month Per Shared Password Instead, Subscriber Growth Hit Its Best Year Since the Pandemic.

The Complaints Department

The Complaints Department

— 3 min read
Share
Netflix Spent Six Years Telling Customers Love Is Sharing a Password. Once It Started Charging $7.99 a Month Per Shared Password Instead, Subscriber Growth Hit Its Best Year Since the Pandemic.
Photo by Thibault Penin / Unsplash

On March 10, 2017, Netflix's official Twitter account posted four words that would follow the company around for the next six years: "Love is sharing a password." It was a promo tweet for a show called Love, but it was also, unmistakably, a policy statement — an invitation, in the company's own marketing voice, to do the thing it would later spend a fortune trying to stop people from doing.

By the time Netflix got around to admitting this was a problem, the numbers were staggering. In a shareholder letter, the company disclosed that more than 100 million households worldwide — roughly 43% of its then-220-million user base — were watching on accounts they hadn't paid for, about 30 million of them in the US and Canada alone. Netflix's explanation for finally acting wasn't that sharing had become a betrayal of the brand's own slogan. It was that the practice was "impacting our ability to invest in great new TV and films." Six years of encouragement ended not with a correction, but with an invoice.

The Test-Market Rollout

Netflix didn't flip the switch globally overnight. It piloted the crackdown first in Chile, Costa Rica, and Peru starting in March 2022, letting customers pay roughly $2–3 a month per "Extra Member" slot instead of sharing for free. The rollout was rocky enough that consumer-protection agencies in all three countries called meetings with Netflix in May 2022 to sort out complaints and confusion. Undeterred, Netflix expanded the test to more Latin American markets that July, then to Canada, New Zealand, Portugal, and Spain between February and May 2023 — a slow-motion expansion that was really a live rehearsal for the main event.

The Global Launch

The main event arrived on May 23, 2023, when paid sharing went live in the US, UK, and more than 100 other countries, covering over 80% of Netflix's revenue. US customers on the ad-supported and Basic plans couldn't add extra members at all; Standard subscribers could add one for about $7.99 a month, Premium subscribers up to two. UK members paid £4.99 per extra member; Canadian members paid roughly CAD $7.99. The tweet about love had a price tag now, and it was billed monthly.

The Payoff

The results arrived almost immediately. Q2 2023 — the first full quarter under the US and UK crackdown — brought 5.9 million net subscriber adds, more than triple what analysts had forecast. Netflix called the policy "revenue and paid membership positive" in every region where it launched. Q3 2023 was even better: 8.76 million net adds against an expected 5.49 million, the strongest quarterly gain since Q2 2020, when pandemic lockdowns had driven people indoors and onto streaming services en masse. Revenue was up 8% year over year that quarter, and operating income hit $1.9 billion, up 25%. Q4 2023 added a then-record 13.1 million subscribers, closing the year with more than 260 million paid members. Across all of 2023, Netflix added roughly 30 million subscribers total — its best growth year since the COVID-driven surge of 2020. Shares were up nearly 62% year-to-date by mid-2023 as the crackdown rolled out, and they kept climbing to multi-year highs through 2024.

Netflix did not discover in 2023 that password sharing was bad for business. It discovered a way to charge for something it had spent six years, in writing, on its own official account, calling love.

Filed from public reporting:

Read more

Apeel's Grape Seed Coating Once Kept Six in Ten American Supermarket Avocados From Spoiling. Then the Internet Found the Safety Data Sheet for a British Degreaser Also Called Apeel.

Apeel's Grape Seed Coating Once Kept Six in Ten American Supermarket Avocados From Spoiling. Then the Internet Found the Safety Data Sheet for a British Degreaser Also Called Apeel.

Apeel Sciences began in 2012 with a $100,000 grant from the Gates Foundation, awarded to a materials scientist named James Rogers to reduce the amount of food that rots between the farm and the plate in countries without reliable refrigeration. A second grant of about $1 million followed in

By The Complaints Department
A Texas Power Company Charged $9.99 a Month to Let Customers Pay Exactly What the Wholesale Market Paid. In February 2021 the Market Paid $9,000 a Megawatt-Hour, and Griddy Drafted It Straight From Their Accounts.

A Texas Power Company Charged $9.99 a Month to Let Customers Pay Exactly What the Wholesale Market Paid. In February 2021 the Market Paid $9,000 a Megawatt-Hour, and Griddy Drafted It Straight From Their Accounts.

Griddy Energy, a small Houston company that launched in 2017, sold Texans a simple idea. Most households in the state's deregulated electricity market pay a retailer a fixed rate, and the retailer carries the risk that wholesale power will cost more than it charged. Griddy removed the retailer&

By The Complaints Department
Australia Paid Up to $1,600 a Home in 2009 to Insulate a Million Ceilings in a Year, Using Installers Who Signed Up Online. Its First Industry Meeting Heard New Zealand Had Tried This and Three People Electrocuted Themselves.

Australia Paid Up to $1,600 a Home in 2009 to Insulate a Million Ceilings in a Year, Using Installers Who Signed Up Online. Its First Industry Meeting Heard New Zealand Had Tried This and Three People Electrocuted Themselves.

On 3 February 2009 Kevin Rudd announced the Energy Efficient Homes Package, part of a $42 billion stimulus plan meant to carry Australia through the global recession. Its centrepiece, the Home Insulation Program, offered free ceiling insulation worth up to $1,600 a home, with a target of 2.2

By The Complaints Department