Years earlier than Netflix warned of a possible crackdown on password sharing, the streaming service appeared to encourage customers to just do that.

In a March 10, 2017, Twitter thread that was selling its unique collection Love, Netflix wrote, "Love is sharing a password." The only tweet within the thread garnered greater than 15,000 likes and greater than 4,600 retweets.

Password sharing has develop into a standard apply amongst Netflix customers, a lot in order that the corporate estimates greater than 30 million households within the U.S. and Canada—and greater than 100 million worldwide—have interaction in it, CNBC reported. However after the corporate stated in its quarterly letter to shareholders Tuesday that it misplaced subscribers for the primary time in additional than a decade, it warned that a crackdown on password sharing might be within the works.

The letter, which was obtained by CNN, stated Netflix misplaced over 200,000 subscribers within the first quarter of 2022 and predicted it may see a further lack of 2 million subscribers within the 12 months's second quarter. The information triggered Netflix's inventory worth to drop by as a lot as 25 % in after-hours buying and selling.

Netflix Password Sharing
Netflix is warning a crackdown on password sharing might be within the works. Above, the corporate's emblem on prime of a constructing in Hollywood, California.Chris Delmas/AFP through Getty Photos

Netflix attributed the subscriber loss to a number of elements.

"Our comparatively excessive family penetration—when together with the big variety of households sharing accounts—mixed with competitors, is creating income progress headwinds," the letter learn, in line with CNN.

"Account sharing as a share of our paying membership hasn't modified a lot through the years, however, coupled with the primary issue, means it is tougher to develop membership in lots of markets—a problem that was obscured by our COVID progress," the letter added.

Following the invasion of Ukraine in late February, Netflix stated it will be suspending its service in Russia, a transfer that has undoubtedly had an impression on subscriber numbers.

It was not instantly clear what the crackdown on password sharing would entail.

Whereas Netflix was one of many first streaming companies, after starting as a mail-order film subscription service, it has confronted elevated competitors lately. After it started providing the streaming choice in 2007, comparable companies adopted, resembling HBO Max, Disney+ and Peacock.

As of January, Netflix nonetheless led considerably in subscribers, 221.8 million globally, in contrast with its opponents, Cleveland.com reported.

Newsweek reached out to Netflix for remark.