Facing a steady decline in account holders for the first time in a decade, Netflix made a decision to ban password sharing. Although first met with a lot of public outcry and threats to cancel accounts, it appears Netflix’s plan to drive up declining membership numbers has worked better than expected.
Since enforcing its password sharing ban limiting account use only to people within the same household, Netflix has seen a massive increase in new memberships. According to a Second Measure report tracking consumer transaction data, new Netflix accounts grew 236% between May 15th and June 18th.
Many thought Netflix would see a rapid decline in accounts, but during the first week of the password sharing ban new U.S. subscriber numbers rose 117%. The week ending on June 4th saw the highest increase at 59% week over week and 35 percent for the week of June 11th. The numbers continued to rise over the next few weeks and had jumped up 204% compared to the week before the ban went into effect.
Some of Netflix’s growth is from adding a less expensive ad-supported tier to its membership plans, which added around 5 million new accounts within six months of launching. The ad-supported plan costs $3 cheaper than the Netflix basic without ads plan, which is $9.99 per month.
Since then, there has been somewhat of a slowdown in new subscribers according to the Bloomberg Second Measure report. Netflix is still way ahead of where it used to be in terms of account holders.
This Wednesday, Netflix will announce its official second-quarter earnings, which Fast Company reports will hold more details about how the password sharing ban impacted user numbers alongside revenue. Netflix’s first quarter report showed an increase of 1.75 million subscribers and totaling approximately 232.5 million subscribers worldwide.