Horowitz: Netflix password clampdown not to feared | Media Analysis | Business | News | Rapid TV News
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With SVOD leader Netflix said to be on the verge of a major campaign against password sharing, a study by Horowitz Research suggests  the decision may not spell doom and gloom for the service and others, despite an expected fall in subscribers that the move may bring.
Netflix multiple device 30May2022
The analyst’s State of OTA 2022 report tracked the evolving market for new and potentially disruptive video technologies, and was conducted among 1,600 adults with an oversample that resulted in 855 antenna owners.

The study found that the average US streamer uses 7.1 services in a typical month— 4.3 of which are subscription services, paying on average $75.8 a month for their offers, up from $49.3 in 2021. And with so many SVODs available, and considering the rising costs to subscribe, Horowitz confirmed that SVOD users are increasingly engaging in the practice of sharing passwords with others to offset costs.

The study also noted log-in/cost sharing across all the subscription streaming services. It revealed18% of TV content viewers share access to Netflix while 42% pay for the service themselves; 15% share access to Amazon Prime Video with 44% paying for the service themselves. This translates to about one in three Netflix users and one in four Amazon Prime Video users sharing access. Notably, the study also found that the lower the penetration of the service, the more likely it is that users are sharing passwords. For example, 11% of consumers surveyed have Showtime Now, and 60% of Showtime Now subscribers share their passwords, as do 51% of BritBox and 47% of Starz users.

Conversely, the more valuable the service was perceived to be, the less likely that consumers will share their passwords. For example, 83% of Netflix users and 81% of Amazon Prime Video users think the respective services offer excellent value for the money, compared to 63% of Showtime Now users and 60% of BritBox users who feel that way. Moreover, seven of 10 Netflix users who share passwords would be willing to pay full price for the service, even if they could no longer share access.

“Netflix and Amazon Prime Video have long proven their value for the money to subscribers; Netflix because of its extensive library of syndicated and original content, and APV with its tie-in to other Amazon Prime benefits. As such, while Netflix’s crackdown on password sharing will likely lead to subscriber loss, the majority of subscribers will stay with the service. However, Netflix will need to keep its perceived value high in order for consumers to continue to justify the investment,” observed Adriana Waterston, chief revenue officer and insights and strategy lead for Horowitz Research commenting on the State of OTA 2022 report.State of OTA 2022 report.

“This will certainly be a challenge for Netflix moving forward as their programming costs continue to increase and as they add commercials. Also, other services considering password crackdowns will need to justify this move by finding ways to add value to their services, making them stickier for consumers.”