The news: As Netflix matures and faces moderating growth in its home US market, its paid memberships in Latin America rose 4.1% year-over-year (YoY) in the first quarter.
Zoom out: Underscoring its importance to growth, Latin America was chosen as the region to pilot the company's password crackdown.
- Netflix launched an “add extra member/household” feature in eight countries in 2022, as the region has a higher rate of account sharing than others. Brazil and Mexico were excluded from the pilot to avoid upsetting subscribers in its two biggest Latin American markets.
- The company quickly reversed course amid a public outcry from subscribers. In true Latin American fashion, users protested the changes on social media. The hashtag #ChauNetflix (“ByeNetflix” in English) trended on Twitter not long after. Netflix sunset the feature in October after considering customers’ feedback.
- Netflix’s policy changes didn’t stymie subscriber growth in Latin America. Despite users threatening to leave the platform en masse, Latin America was Netflix’s third-fastest-growing paid subscriber market in Q1 2023 after Asia-Pacific, and Europe, the Middle East, and Africa (EMEA), where paid memberships rose 17.1% and 4.9% YoY, respectively.
- Latin America shows promise for Netflix’s bottom line. Despite having 33.1 million fewer paying members than regions like the US and Canada in Q1 2023, Latin America was the second-fastest-growing market for average revenues per Netflix membership (ARM), at 2.7% YoY, according to the company. Latin America’s ARM in Q1 was roughly half that of the US and Canada, at $8.60.