Kantar, a market research firm, estimates that Netflix Inc. lost over one million subscribers in Spain during the first three months of 2023.
This a possible sign that the streaming giant’s anti-password-sharing initiative is failing. For users in Spain who share their login information with another household, Netflix started charging a monthly fee of €5.99 ($6.57) beginning at the beginning of the month of February.
Netflix Suffers Loss of Over a Million Users
The move was linked to a loss of over a million users, with roughly two-thirds of those people using a stolen password, as shown by research from Kantar based on surveys of household streaming habits.
Even if most of those one million users weren’t paying subscribers, the loss would still hurt Netflix’s reputation, says Dominic Sunnebo, global insight director at Kantar’s Worldpanel Division.
According to research conducted by Kantar, the number of subscription cancellations in the first quarter tripled compared to the previous period. In the second quarter, 10% of Spanish Netflix users said they were going to cancel.
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Company Expands Madrid Production Hub
A similar fee was implemented in Portugal, Canada, and New Zealand, following its introduction in several Latin American nations.
When Netflix announced the news on April 18, it noted that “we see a cancel reaction in each market when we announce the news.” The company expected the decline to be brief before non-paying customers created their own accounts.
Netflix reported that its paid membership base in Canada is now larger than it was before the launch of paid sharing and that the country’s revenue growth has accelerated and is now growing faster than the United States.
Netflix reports that more than 100 million people around the world use free accounts. The company does not break down this number by country.
The company predicts that the implementation of password policing and the release of an ad-supported, cheaper streaming version will spur expansion in the second half of 2023.
It appears that Netflix’s investment in Spanish-language content is paying off. Two of the top five series in Spain during the first three months of 2023 were both available on Netflix, per data from Kantar.
In 2019, the company opened its first European production hub in Madrid, a facility whose size had doubled by the end of 2018.
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