First, it is becoming increasingly clear that the pace of growth of our underlying target market (broadband households) depends in part on factors beyond our direct control, such as the adoption of connected TVs (since most of what we watch is in televisions), the adoption of on-demand entertainment and data costs. We believe these factors will continue to improve over time, making all broadband households potential Netflix customers. Second, in addition to our 222 million paying households, we estimate that Netflix is shared with more than 100 million additional households, including more than 30 million in the UCAN region. Account sharing as a percentage of our paid membership hasn’t changed much over the years, but, coupled with the first factor, it means it’s harder to grow membership in many markets, an issue that has been masked by our growth from COVID.
Netflix has 222 million “paying households” but estimates that the service is shared with more than 100 million “additional households,” 30 million of which are in the US and Canada. That indicates that there are a large number of people who do not pay Netflix directly for the ability to stream their favorite shows.
At this time, the company is testing a new feature in Chile, Costa Rica and Peru, where subscribers can add “subaccounts” for up to two people outside their household at discounted prices. It’s unclear when the trial might expand to more countries, but given how many people who watch Netflix might be paying but aren’t, it seems likely that Netflix will want to roll it out more widely sooner rather than later.
Netflix also revealed on Tuesday that it lost subscribers for the first time in a decade Last room.