Will Netflix Password-Sharing Crackdown Work in Nigeria?

By Vanessa Obioha

In its second quarter earnings report, Netflix reported that its password-sharing crackdown helped it to add nearly six million subscribers, totalling its number of paid memberships to 238.4 million. The company started its password-sharing crackdown in the U.S. last year as a way to increase the number of paid memberships. It called the strategy  “paid sharing,” which encourages password sharers to pay to add another subscriber or to buy their own subscription.

While this seems to have yielded dividends for the streaming giant, it is uncertain if the crackdown formula will work in Nigeria where the economic hardship is biting harder every day. Moreover, more streaming platforms are emerging and competing viciously for eyeballs daily.

A basic plan on Netflix costs N2,900 per month and allows you to add up to four profiles but only allows downloads on one device. Showmax, MultiChoice Nigeria streaming option has a basic plan that offers the same price and allows streaming on two devices at the same time. Amazon Prime which is relatively new in Nigeria has a basic plan that costs N2,300, the lowest among all.

For these streaming platforms, going local has become a winning strategy. As such, they woo local content creators with either licensing or producing content. Being the first global streamer to extend a hand to Nigerian filmmakers and given its diverse reach, Netflix seems to have more local content on its slate. This year, its original film ‘Aníkúlápó’ won the Best Overall Movie at the Africa Magic Viewers Choice Awards (AMVCA).

Notwithstanding, Amazon Prime is hot on their heels while Showmax relies on the strong relationship MultiChoice Nigeria has with local content creators to expand its vault. The platform is heavy on TV series with hit shows such as The Real Housewives of Lagos and Abuja, ‘Wura’ as well as streaming the popular reality TV show, Big Brother Naija.

Netflix is however not immune to the competition in Nigeria as well as in the USA where it faces stiffer rivals.

“Our biggest traditional entertainment competitors, Disney, Comcast/NBCU, Paramount Global and Warner Brothers Discovery — with their large content libraries and creative expertise — are now focused on profit so they can build sustainable, long-term streaming businesses,” it said in its letter to stakeholders.

“And our big tech competitors Apple, Amazon and YouTube — with their broad reach and deep pockets — continue to invest heavily to grow their streaming revenues.”

It disclosed that its  $32 billion revenue in 2022 was lower compared to YouTube’s nearly $40 billion, and Amazon’s $35 billion subscription revenue in 2022, “of which we assume the majority relates to the Prime bundle that includes shipping, video and other services. Combined with Apple’s video initiatives, there’s quite a competitive battle happening.”

While Netflix recorded more paid memberships (about 2.4% increase from last quarter) in the EMEA (Europe, Middle East and Africa) region, its market size in Nigeria is relatively low compared to other regions. Therefore, cracking down on password-sharing may not yield as much dividends as in other regions. Perhaps, it may work sometime in the future, but certainly not now that the economy is standing on shaky legs.