Netflix expects to continue to flip password sharers into new customers over the next several quarters, with hundreds of millions of house holds still untouched by the sharing crackdown.
“We’re staging this out,” Co-CEO Greg Peters said on an investor video interview following the release of its third-quarter results. He noted that there remains customers who haven’t been affected by the crackdown yet.
The positive reaction to the crackdown — leading to the addition of new subscribers rather than customer defections — has turned into a surprising source of growth for Netflix. When word of this move first came out, customers railed against the idea and vowed to leave the service. Yet its success has inspired other streaming services to explore their own tactics to halt password sharing — with Disney explicitly saying it has looked into this.
“We’re incredibly pleased with how it’s growing,” Peters said.
Netflix has been rolling this out to different markets and with segments of customers, but his comments shed some light on just how much further it can go with the crackdown.
Peters said there are technical and behavioral reasons for staging out the crackdown. The company is working to improve the offerings available and wants to time new options as it addresses more of its subscribers.
“We want to show up with the right product at the right moment,” he said, noting that the plan was to avoid seeing “people spin off.”
He noted that there will be a cohort of “borrowers” that will not get pinged by Netflix. “There are a set of borrowers we aren’t converting,” Peters said.
While he wouldn’t go into detail about this group, he said that there are “hundreds of millions of qualified households we want to win over the next several years.” Specifically, he said he wanted to go after this group in the same way it would approach new subscribers, and provide programming, features and other reasons for them to sign up.