Netflix lost a significant amount of users in Spain because of its new policy to crack down on password-sharing.
According to the market research group Kantar, over one million users ended their subscriptions in the first quarter of 2023. Netflix's decision to introduce monthly fees for people who shared their login details with other households caused many subscription cancellations.
Also, the company's implementation of technical measures to detect sharing has led to a decline in subscription numbers.
What is Netflix's New Policy?
In early February, Netflix introduced a monthly fee for users who share their login details with another household in a bid to increase its revenue. The fee has been introduced in Spain, Portugal, Canada, and New Zealand after a roll-out in several Latin American countries.
However, according to Kantar, this move has backfired specifically in Spain, where subscription cancellations in the first quarter tripled compared to the previous period. Moreover, of all remaining Netflix subscribers in the country, one-tenth said they plan to unsubscribe in the second quarter.
And What Happens Next?
Now, the company is trying to regain the confidence of the Spanish and to avoid that the loss of a million users – even if most weren't paid subscribers – became a blow in terms of word-of-mouth recommendation. Above all, must find the balance between generating revenue and retaining users.
It remains to be seen how this giant of streaming services will respond to the decline in subscription numbers and whether this decision coming from the users will be reversed in the future.
