Netflix has hinted that it may crack down on password sharing as the streaming giant suffers its first net loss of subscribers in a decade.

The company’s customer base fell by 200,000 people in the first three months of the year. Netflix had just over 110 million users in 2017 and has since doubled that to 220 million currently. In the previous quarter, the last three months of 2021, the company added 8.3 million users.

While the drop is small, the news knocked around $90 off the company’s share price – from around $350 to where it currently hovers about $260. This cost Netflix about $40 billion of its value.

Netflix has also projected that it may lose another two million subscribers in the next three months.

“Our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds,” the company said in a letter to shareholders.

Among its other plans to boost revenues is to include a cheaper package that includes advertising.

According to Netflix, 100 million households around the world share passwords. The practice potentially costs the company billions in lost revenues. In addition to casual password sharing by individuals, organised marketplaces offer people access to accounts for as little as $1.

In response, Netflix warned that it would crack down password sharing outside of people’s household, saying it may start charging users who do so. It has begun trialling new option for people to add other people to their plan for a few dollars, though this was only rolled out in select countries.

Netflix has also blamed growing competition from other streaming services, such as Disney+, making it harder to grow membership.

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As concerns grow about the price of living on the back of food and energy price increases, Netflix increased the cost of its services back in March. Its basic and standard packages went up by £1 while its premium service grew by £2, to £15.99.

Recent research from Kantar found that over 1.5 million streaming services were cancelled in the UK in the first quarter of this year, with more than half of these being to save money.

The contraction of its userbase can also be blamed on its decision to pull out of Russia in the wake of the country’s invasion of Ukraine. Though a small market for the company, it lost an estimated 700,000 viewers.

The fall in viewership comes despite high performing TV shows coming out in recent months – its highest watched TV show, Squid Games, came out in September 2021, bringing in over 1.6 billion hours watched, while it’s most popular movie, Red Notice, notched up around 330 million hours viewed since being released in November last year.

The drop in users also followed a massive surge in growth in 2020, when the company added 36 million subscribers as global lockdowns drove people to stream more video content. However, growth for 2021 was only 18.2 million, the slowest year since 2016.

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