Netflix has experienced a decline in its Australian subscriber numbers for the first time. 

As of June 2023, Netflix's Australian subscription numbers dropped by 3 per cent, according to the annual Australian Subscription Entertainment Study by research firm Telsyte.

While competing platforms like Amazon Prime Video and Disney+ have seen an increase in Australian subscribers, Netflix's decline raises questions about the streaming giant's content strategy and its response to a shifting market.

Besides increasing competition, Netflix has also implemented stricter measures to combat password sharing, a common practice among users looking to save money. 

The company's crackdown on password sharing comes as it estimates that globally, around 100 million people access Netflix content through passwords from others, out of 232 million paying subscribers.

Despite these challenges, Netflix recently reported significant international subscriber growth following its password-sharing measures and the introduction of more affordable subscription plans, including ones with advertising.

The Telsyte study reportedly revealed that password sharing is prevalent in Australia, with one in three streaming subscribers admitting to sharing their login details with friends and family. 

Surprisingly, only 7 per cent of those who subscribed to Netflix in the past year cancelled their subscriptions due to these new sharing rules.

While Netflix remains the leader in Australia's streaming market, the study suggests that Australian subscribers have become more discerning. A

Australian consumers are known to prioritise streaming services in their budgets but are increasingly willing to switch between platforms depending on the content available.

This behaviour, combined with changes in content release strategies, appears to contribute to Netflix Australia's subscriber decline. 

The binge-watching model is no longer the sole preference, with viewers showing interest in traditional weekly releases.

Despite Netflix's dip, the study underscores the growing importance of streaming in Australian households, with an estimated total of over 30 million video-on-demand subscriptions projected by June 2027.