Password sharing has been a highly contested topic for streaming services for a while, but recently, Netflix took a firm step to limit it—and users were not happy. A change to their Terms of Service page on February 2 indicated users would soon be charged a fee for having multiple users of one account outside their household. This meant that unless all users under one account are linked to the same home address, the account owner will be charged an extra fee per person on top of the monthly subscription cost. This was, unsurprisingly, not a hit with their users—and now, YPulse data shows 79% of Gen Z and Millennials agree that “Streaming service platforms shouldn’t charge for shared passwords.”
The backlash was quick and intense: social media was swept with complaints suggesting Netflix’s content was no longer worth its price, and that some were ready to cancel their account altogether in response. Because, while good for Netflix’s bottom line, it would certainly have negatively impacted college students who use their parents’ account, elderly family members, and even new parents who are strapped for cash and are sharing an account to soothe their baby with CoComelon.
A day after the internet erupted in response, Netflix announced that the new rule had been published “in error.” (Though they then announced a few days later that they would be charging an additional fee for every “extra member” on an account in Canada, New Zealand, Portugal, and Spain.) But still, users were outraged simply at the prospect—and know that just because it was rolled back now, doesn’t mean Netflix won’t come for password sharing again in the future.
YPulse has long tracked young consumers’ use and opinion of Netflix, and our data shows it’s their number one source of video entertainment (now followed by TikTok), so the possibility of losing access to their favorite—and often, most costly—content platform was not taken lightly. To get an accurate sense of how many young consumers this would affect should it be set in stone in the future, and what kind of response the company (or other streaming giants) could anticipate, we asked 13-39-year-olds about their Netflix accounts and who uses their password:
Nearly half of young consumers would be impacted if password sharing was restricted
YPulse data shows nearly half (48%) of all young consumers would be impacted by strict password sharing policies, either because they share their own account or use someone else’s to watch Netflix. The majority of those who use Netflix are sharing their account in some way, with only a third saying they use Netflix but don’t share with anyone. The high number of users who are sharing accounts is clearly the exact reason Netflix wanted to crack down in the first place.
Interestingly, though we know that the majority are against the restrictions Netflix was planning, over half (51%) of young consumers overall do agree “I’m willing to pay a little extra in order to let more people use one password.” But the divide is clearer amongst Gen Z and Millennials; the older gen is more likely to agree they’d be willing to pay (54%), while the majority of the younger gen disagrees (56%).
So, should password sharing actually be locked down, it seems a bit uncertain what young consumers would really do. As it is, our data shows 60% are the primary owner of the account, meaning their watching experience would not be at risk of changing. But for the 22% who use someone else’s account, they’d be faced with the choice of paying to be added onto an account, paying for their own account entirely, or saying goodbye to Netflix. And our data shows the answer is not what Netflix would hope to hear…
The vast majority of Gen Z would stop using Netflix before paying for their own account
Overall, 65% of young consumers tell YPulse they agree that “I would stop using a streaming service if they took away the ability to share passwords/accounts.” But those who don’t share their password to begin with, or who are the main owner of the account may not actually feel emboldened enough to give up their favorite shows on the principle of no more sharing. So, YPulse asked young consumers who currently use someone else’s account watch what they would do if password sharing was taken away:
Overall, 62% of young people who watch Netflix through someone else’s account say they would stop using it if password sharing were no longer an option. Of course, 13-17-year-olds are the most likely to say they would choose not to use Netflix at all (74%), as they’re the least likely to be paying for their own streaming services. But 18-24-year-olds are actually the most likely to be using someone else’s password in the first place, and 70% say they would also opt to give up Netflix over paying for an account of their own. Millennials who use someone else’s password currently are far more likely to say they’d start paying for their own account if they couldn’t share, but more than half (55%) still say they’d stop watching.
It’s likely no coincidence that Netflix is making password sharing changes after beginning to offer their cheaper ad-supported subscription tier. Their announcement on password sharing restrictions to users in Canada, New Zealand, Portugal, and Spain showed even the top tier subscription is eligible for only two additional members on the account, meaning many users who share accounts with many others would certainly be faced with the decision of paying for an account of their own. And while YPulse data shows that most Gen Z and Millennials already use, or would be interested in using, ad-supported streaming services for a lower price, their views on password sharing indicate they would likely rather split the cost of an ad-free account. But, for now, U.S. Netflix users won’t have to make these decisions, though if they do, we know how young consumers will be making their choice.