Subscribers abandon Netflix as cost of living bites

The streaming service’s crackdown on password sharing caused quite a stir and doesn’t appear to have worked.

The streaming service’s crackdown on password sharing caused quite a stir and doesn’t appear to have worked. Picture: Jamie McCarthy/Getty Images.

The crackdown by Netflix on password sharing to boost subscriber numbers appears to have backfired, as new figures show subscribers fell for the first time since its launch in Australia in 2015.

Research firm Telsyte’s annual industry survey revealed that the number of Netflix subscribers had plunged three per cent to 6.1 million over the past year.

That means around 189,000 Aussies have ditched the service in the last 12 months.

In May, Netflix announced the sharing change, meaning families or friends in different locations could no longer watch Netflix using the same account.

Instead it added a new payment plan option allowing users to add an ‘extra member’ to standard or premium plans for an additional $7.99 a month.

It prompted backlash from outraged customers on social media threatening to cancel their accounts.

Netflix's produces original content like the Chris Hemsworth headlined ‘Extraction 2’ Picture: Jamie McCarthy/Getty Images.

Utilities writer and streaming broadband expert at Finder, Mark Neilsen, told news.com.au that by cracking down on password sharing, Netflix was trying to increase subscribers numbers, a move that has evidently failed.

Mr Neilsen said that cost of living pressures were the biggest reason people were dropping streaming subscriptions.

“Our August survey found that 27 per cent of people had unsubscribed from a streaming service and of those, 44 per cent had done so to save money,” he said.

But despite the fall, Netflix remains the most popular streaming service in Australia.

Netflix was the only major subscription TV service to record a fall in subscriber numbers. Picture: Telsyte.

Paramount+ recorded the biggest rise in subscribers numbers over the past year, up 41 per cent to 1.5 million. It was followed by Foxtel’s Binge, up 22 per cent to 1.5 million.

Amazon Prime Video increased subscribers by nine per cent in the past year to 4.5 million and Kayo Sports by eight per cent to 1.4 million, while Disney+ increased its subscribers by one per cent to 3.1 million, and Stan grew two per cent to 2.6 million.

The figures include people currently on free trials, although they may soon become a thing of the past.

The CEO of Nine Entertainment, which owns Stan, Mike Sneesby told The Australian Financial Review that free trials no longer make sense, and flagged that Stan may look to end them.

Disney+ and Kayo have also moved to scrap free trials, with the Kayo change to take effect from late September.

Netflix subscription prices have risen since they first launched in Australia. Picture: Netflix.

Finder’s Consumer Sentiment Tracker, released last month, found that the average Aussie has two streaming services while 69 per cent of us subscribe to at least one streaming service.

On average, we spend $45 a month on streaming, according to the Finder statistics.

Streaming services have become more expensive since they were first launched in Australia, with Netflix among the first to increase its prices in November 2021, Mr Neilsen said.

The Telsyte report found the subscription streaming market in Australia was worth $2.7 billion in the year to June 30, up 14 per cent increase on the previous year.