Netflix is facing a decline in subscribers in Australia following its recent crackdown on password sharing, according to a study conducted by research firm Telsyte. The Telsyte Australian Subscription Entertainment Study 2023 report reveals that subscriber growth has slowed down over the past year, partly due to the rising cost of living in the country. The study suggests that Netflix’s ban on password sharing has also contributed to the decline in Australian subscribers, with the company losing 7% of its subscriber base in the past twelve months.
The findings of the study highlight the delicate balance that streaming services must strike when it comes to addressing the issue of password sharing. While Netflix initially faced backlash for its policy, it did experience a surge in growth as banned viewers signed up for new accounts. However, the study warns that there is a potential risk for other streaming services that are considering their own crackdowns on password sharing.
According to the Telsyte report, approximately one in three streaming video subscribers in Australia share their services with others. Furthermore, over 80% of these subscribers stated that they would continue to share accounts on platforms that permit this practice. Despite Netflix allowing account holders to add additional members outside their household for a fee, 80% of the Australian participants surveyed indicated that they would cease sharing accounts altogether if required to pay for the privilege. Telsyte noted that Netflix’s loss in subscribers due to cancellations surpasses the number of new members signing up for the extra member plan.
Although Netflix faced criticism for its decision to block password sharing, there are other factors contributing to the drop in subscription numbers. The report suggests that binge-watching, which Netflix popularized by releasing entire seasons of shows at once, may be losing its novelty appeal. Subscribers across all streaming platforms are now prioritizing quality programs over quantity.
Additionally, the Telsyte report reveals that approximately 66% of participants expressed a desire to consume more locally produced content that showcases Australian stories, voices, cultures, and values. This highlights a preference for content created by local talents.
The report also emphasizes that streaming platform loyalty among members is limited, with subscribers willing to cancel their memberships in favor of competitors that offer a better content selection. Many Australians are also turning to free streaming services that provide access to similar content. In fact, more than 60% of the participants stated that ad-supported platforms fulfill all of their entertainment needs.
Although Netflix experienced a 3% decline in new member sign-ups, other platforms like Amazon Prime Video and Disney+ have seen increases since June 2023. Despite this, Netflix remains the leading streaming service in Australia, boasting 6.1 million members, as reported by Telsyte.
A spokesperson for Netflix was unavailable for immediate comment on the study.
