Streaming giant Netflix will begin its crackdown on password sharing in the first quarter of this year, after its release Company earnings report to shareholders last week.
The practice of sharing passwords with people outside the subscriber’s home will become more complex and likely to include additional charges for sharing a single subscription across multiple locations.
“As we roll out paid sharing, members in many countries will also have the option to pay extra if they want to share Netflix with people they don’t live with. Like today, all members will be able to watch while traveling, whether on their TV or mobile device.”
Based on experience with the new, stricter rules in select countries in Central and South America last year, the company has conceded that it expects a negative reaction in the short term.
“As we work through this transition — and as some borrowers stop watching either because they don’t convert to additional members or fully paid accounts — engagement may be impacted in the near term, as measured by third parties, such as Nielsen’s The Gauge,” the statement said.
“However, we believe the pattern will be similar to what we’ve seen in Latin America, with participation increasing over time as we continue to offer a large slate of programming and subscription for self-account borrowers.”
Netflix couldn’t be more specific than “later in Q1 2013” about when the campaign will begin.
The new model could see Netflix users in Australia, for example, paying about $4 more per month if last year’s experiences in Costa Rica, Chile, Peru, Argentina, El Salvador, Guatemala, Honduras and the Dominican Republic are any guide. These countries were targeted by the company because password sharing seems to be particularly popular there.
Subscribers had no restrictions placed on mobile devices such as smartphones, tablets or laptops, to enable legitimate users to continue accessing their account while traveling.
But the new system could put an end to logging into your account to watch a Netflix show at a friend or relative’s house, as well as sharing a single subscription across multiple homes.
Netflix’s director of product innovation, Chengyi Long, explained in an updated blog post in October how the new system might work. Only one household is allowed to use one Netflix account, but it can be used across multiple devices. To add additional families, an additional monthly fee will apply (in most Latin American countries it was $2.99). While traveling, the account will only be accessed by tablet, laptop or mobile phone. Subscribers will be able to log in to remove unwanted families from their accounts.
“Today’s widespread sharing of accounts among families undermines our long-term ability to invest in and improve our services,” she said.
“So we’ve been carefully exploring different avenues for people who want to share their accounts to pay more.”
in 2022 Netflix lost 200,000 customers in the first quarter alone, and admitted that it expects to lose another two million people in the second quarter. The company blamed the decline on a number of factors, including increased competition and the war in Ukraine
It wasn’t long ago specified how Netflix plans to enforce the new system.
In the Latin American trials, if a change is detected in the location of an account that has been in use for more than two weeks, the owner receives an in-app notification giving them the option to change the home address or pay a fee to add the new address.
in an interview With Variety on January 19, Netflix co-CEO Greg Peters admitted that the crackdown on shared passwords “wouldn’t be a universally popular move” and the company would begin to enforce the new system by giving customers who continue to share accounts a “nice nudge” to pay extra for multiple households to use.
In the report submitted to shareholders on the same day, Netflix reported a total of 231 million paid memberships in 2022, generating $32 billion in revenue and $5.6 billion in operating income.
Netflix Australia declined to comment, saying last week’s shareholder communication on the issue was the most recent.