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Netflix may soon have to stop people from sharing their logins

Netflix Login

They say “sharing is caring,” but people who share their Netflix login credentials with friends certainly don’t seem to care about a potentially serious problem taking shape for Netflix. Shares of Netflix are up more than 82% so far in 2015, and the company is definitely firing on all cylinders. Despite Netflix’s solid results, however, a problem is beginning to take shape that could have a serious impact on the company’s future.

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A couple of charts published in a recent post on Seeking Alpha speak volumes to a problem that could become far more serious for Netflix in the near future. The first shows the big decline in U.S. subscriber growth for Netflix over the past couple of years:

There’s really no mistaking that line — as time marches on, the pool of available new subscribers in the U.S. shrinks for Netflix. The company has landed a few new deals in the recent past that should promote growth, including deals to bring preinstalled Netflix apps to pay TV providers’ set-top boxes, but another chart shows a problem that is bigger for Netflix than any of its main competitors:

As seen in the chart above, more people share their Netflix logins with users outside their households than either Hulu Plus or Amazon Prime Instant Video. This means that rather than pay $7.99, $8.99 or $11.99 for a Netflix plan, people are using their friends’ logins to steal Netflix service.

Unfortunately, it doesn’t look like Netflix’s new family sharing plans are having a big impact.

Some people will always want to get streaming services for free instead of paying to support the companies that provide these services, and Netflix has been very lenient so far in allowing people to share their logins. The company is indeed expanding into potential new growth markets like China, but down the road, Netflix may have no choice but to begin cracking down on login sharing as the pool of new U.S. subscribers continues to dry up.

Zach Epstein

Zach Epstein has been the Executive Editor at BGR for more than 10 years. He manages BGR’s editorial team and ensures that best practices are adhered to. He also oversees the Ecommerce team and directs the daily flow of all content.

Zach first joined BGR in 2007 as a Staff Writer covering business, technology, and entertainment. His work has been quoted by countless top news organizations, and he was recently named one of the world's top 10 “power mobile influencers” by Forbes. Prior to BGR, Zach worked as an executive in marketing and business development with two private telcos.