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Netflix's 2023 password-sharing crackdown added roughly 30 million paying users. The company tested two approaches: charging per household or per extra user. An A/B test in Latin America showed the per-user fee drove more upgrades.
Netflix's 2023 password-sharing crackdown added roughly 30 million paying users. The company tested two approaches: charging per household or per extra user. An A/B test in Latin America showed the per-user fee drove more upgrades.
Netflix's password sharing crackdown has been a huge success. It helped add 30 million paying users in 2023, second highest year ever. Netflix built a model to differentiate a single user traveling or one person sharing with lots of people. They tested 2 methods to shake freeloaders. One, pay per household. So this is Reed Hastings' plan. He's the famous CEO for Netflix. Number 2 would be an account could add new users for additional fees. So this is the new co-CEO Greg Peters' plan, right? These co-CEOs had one test versus another, right? So they ran the A/B test in Latin America where password sharing was the most widespread. They found Peters' method, number 2, based on users. So charging people a fee per new user led to more upgrades. So that's why it's the 2nd highest year ever because of this password crackdown.
