One-Third Of U.S. Netflix Subscribers Share Their Passwords, Survey Finds

About one-third of U.S. subscribers to Netflix share their login credentials with others, according to new data from Leichtman Research Group.

The research firm’s online survey of 4,400 consumers confirms the company’s own conclusions in recent years. While 64% of respondents said they pay for and use Netflix only in their own household, 33% indicate some form of sharing. (The remaining 3% are households whose Netflix comes packaged via other subscriptions.)

Netflix has about 74 million subscribers in the U.S. and Canada and has penetrated nearly 70% of U.S. broadband homes. With subscription growth flattening in the region of late, Netflix has recently phased in rate increases in order to continue funding its $18 billion in annual programming spending.

The streaming giant has also made some moves to crack down on password sharing, which costs the company billions in lost revenue. The process is delicate, though, because no guardrails have been in place as the company has grown into a foundational part of the media landscape. There is no small degree of risk in taking actions that could be seen as too punitive on customers.

Earlier this month, Netflix announced a test of monthly fees for password-sharing in three territories outside of the U.S. The rise of password sharing between households, a blog post explained, is “impacting our ability to invest in great new TV and films for our members.”

The password conundrum, of course, faces all streaming players. Newer Netflix challengers like Disney+ and HBO Max have taken a fairly laissez-faire approach to sharing, as have incumbents Amazon Prime Video and Hulu. But with programming costs ballooning, companies appear to be edging closer toward taking a stand. Netflix co-CEO Reed Hastings last year said the company would test various approaches, but would not roll out anything that seems to “turn the screws” on subscribers.

The study found that 29% of all direct-to-consumer services are shared with others outside the household, while 12% of them are fully paid for by someone outside the household.

Younger viewers, not surprisingly, are the most apt to borrow login credentials. The study found 34% of adults from 18 to 34 years old have at least one streaming service that is fully paid for by someone else, compared with 14% of for those 35 and older.

With pay-TV packages delivered via the internet by Hulu, YouTube and others, about 23% of those services are also shared by multiple households, the study determined. About 7% of them are 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,” said Bruce Leichtman, president and principal analyst for LRG.