Survey Finds 38% of Netflix ‘Borrowers’ Will Pay After Crackdown

Some people who have been “borrowing” Netflix may begin paying for it.

Seeking Alpha reported Monday (Feb. 6) that a survey by global investment banking firm Jefferies found that while 62% of the “password borrowers” said they would stop using Netflix when it begins charging for password sharing, 38% would pay.

“Our estimates imply 21% retention of borrowers in 2023, growing to [approximately] 45% by end of 2024 — we feel good about this in light of a survey where 38% indicate immediate retention upon password-sharing crackdown,” Jefferies Managing Director Andrew Uerkwitz wrote in a note to clients, according to the report.

Jefferies did not immediately reply to PYMNTS’ request for comment.

Among those who said they would stop using Netflix, 35% said they could replace it with another service, 31% said they didn’t like the service enough to pay for it and 25% said they couldn’t afford it, according to the Seeking Alpha report.

The survey followed Netflix’s announcement in October that it would crack down on password sharing in 2023.

During an Oct. 18 earnings call, Netflix CEO Greg Peters acknowledged that the company had previously taken a laissez faire approach to account theft.

“We’ve been working really hard to try and find essentially a balance position and approach towards [profile transfer and paid account sharing] that supports customer choice, and frankly, our long history of customer-centricity,” Peters said at the time.

Going forward, account borrowers can either transfer the profile and viewing history they amassed under the old system and simply get their own account, or non-paying users can migrate their old profile to the lower priced Basic with Ads platform and either pay the $7 themselves or have someone else pick up the tab.

“We think [this dual approach] has informed how we think about establishing our service by balancing [user needs] with making sure that as a business we’re getting paid when we’re delivering entertainment value to customers,” Peters said at the time.

PYMNTS research has found that — across retail product subscriptions — 60% of subscribers admit to gaming the system to avoid paying for the services.

Subscribers believe that abusing benefits is easy, and many plan on taking advantage in the near future, according to the “Subscription Commerce Conversion Index: The Challenge of Cheaters,” a PYMNTS and sticky.io collaboration.