What happens when a streamer starts cracking down on password sharing? Some back-of-the-envelope thinking:

• Password-sharers (i.e. those not paying a subscription themselves) ignore messages and continue using the service for as long as they can
• They stop using the service altogether
• They legitimately subscribe to the service and choose a pure SVOD tier so that they don’t have to watch ads
• They subscribe to the service on an AVOD tier so that, sure, they have to watch ads but they pay less than SVOD customers

Is that it? Are there any more options?

I ask in the context of last week’s news that Netflix’s ad-supported tier now has 40 million subscribers globally, a rise of five million on twelve months ago. Over 40% of all signups in countries where the tier is available now opt for the ad-supported tier.

Netflix launched its ad-supported tier in early 2023 at which time (Q12023) it had 233m paid memberships. In Q124, it had 270m paid memberships: an increase of 37m customers.

37m new customers ≈ 40m ad tier customers.

Which begs the obvious question: is almost all of Netflix’s growth since Q123 down to its crackdown on password-sharing? And a follow-up: do crackdowns in password-sharing and the introduction of ad tiers go hand in hand?