One-third (33%) of Netflix subscriptions are shared outside the household, but only 3% are used by multiple households that share the cost of the subscription, Leichtman Research Group (LRG) found in its latest annual Internet-Delivered Pay-TV Services study.

The study, based on an online survey of 4,400 US adults 18 years or older, also found that 15% of those with access to Netflix have the service fully paid for by someone outside the household.

Figure 1: Netflix is currently testing features in Chile, Costa Rica and Peru aimed at curtailing the practice of password sharing.
(Source: Netflix)

Almost two-thirds (64%) of Netflix subscribers fully pay for the service and do not share it with anyone outside the household, LRG found in its fifth annual study focused on virtual multichannel video programming distributors (vMVPDs) and the broader direct-to-consumer (DTC) streaming market.

Among other recent studies, Interpret's "VideoWatch" found that 18% of Netflix subscribers in the US said that they share streaming service passwords with other households. That study, based on a survey of 9,000 consumers in late 2021, also found that 9% indicated that they split the cost of a streaming subscription with another household and share the password.

The numbers are in the spotlight as Netflix starts to crack down on password sharing in tests being conducted in Chile, Costa Rica and Peru.

In those countries, Netflix is piloting an "extra member" feature that enables subscribers on Standard or Premium plans to add accounts for up to two people they don't live with (each with their own profile, personalized recommendations, login and password) for an extra $3 per month. Netflix is also trialing a way for subscribers who share their accounts to transfer profile information, either as a new account or an "extra member" account.

Netflix, which ended 2021 with 224.34 million subscribers worldwide, said that it wants to learn more about the utility of those features before making similar changes in other markets.

Netflix far from alone

Netflix is not the only DTC service dealing with password sharing. LRG said that 29% of all DTC streaming services are shared with people outside the household, and 12% of all DTC services are fully paid for by someone outside the household.

The study also found that 34% of adults between 18 and 39 have at least one DTC service fully paid for by someone else, compared to just 14% of consumers 35 years or older.

The sharing numbers dip in a vMVPD category that includes YouTube TV, AT&T TV, Sling TV and Philo. LRG's study found that 23% of all vMVPD services are shared by multiple households, including 7% of all vMVPD services fully paid for by someone outside the household.

"Password sharing is an inherent feature of most streaming services. Sharing helps to expand the user base and retain customers, but it also creates a gap between the number of households that have a service and actual paying subscribers," Bruce Leichtman, president and principal analyst for LRG, said in a statement.

Digging more deeply into the vMVPD category, adults 18 to 44 account for 65% of all with a vMVPD pay-TV service. Additionally, 79% of vMVPD subs are "very satisfied" with their service, up from 76% in 2020 and 69% in 2018, LRG said.

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— Jeff Baumgartner, Senior Editor, Light Reading