The Netflix logo on display at the Netflix Tudum Theatre on September 14, 2022 in Los Angeles, California. On May 23, 2023, Netflix increased its crackdown on password sharing with people outside of their immediate family in an effort to shore up income at the largest streaming TV business. In a statement released on Tuesday, Netflix said, “A Netflix account is for use by one household.” (AFP)
Many would-be Netflix subscribers will be dismayed to learn that the streaming giant is now actively against the practise of exchanging passwords. The corporation has announced additional methods to restrict access to members of the same home, thus blocking access to its service for users outside of the family who are located in the United States.
Customers on the $15.50–$20 per month regular or premium plan are no longer permitted to give their login information to anybody outside their immediate family. However, for an extra $8 per month, Netflix also offers a family plan that allows two members of the same household to share one account, providing a savings of $6 per month compared to the individual basic plan.
Netflix has not revealed how it will verify the identities of its subscribers, but it has promised that members of the same household will still be able to watch their shows and films whenever and wherever they like.
Netflix’s resolve to tighten down on password sharing is the result of years of wasted money. The expected yearly loss to the corporation due to password sharing was $6 billion in 2021. With over 100 million users abusing shared passwords, Netflix lost out on a sizeable chunk of its income. Given the company’s lacklustre subscriber growth and massive customer losses (200,000 customers in the first quarter of 2022) this was an especially critical problem.
Netflix’s original deadline for implementing the password-sharing prohibition globally was March 31, but the company now expects the transition to be complete in the United States by the end of June. Canada, New Zealand, Portugal, and Spain are just some of the nations where the corporation has started barring freeloaders. Netflix has developed new catalogues that may be accessed using genre-specific codes to help with the move. The business is also considering charging a premium for the ability to set up separate sub-accounts for individuals who live in the same home as a subscriber.
Netflix’s crackdown on password sharing has hazards, despite the fact that the service’s stated goal is to increase income and get more people to pay for individual subscriptions. Netflix’s co-CEO Greg Peters said that some customers may cancel as a result of this move. The corporation is still committed to fixing the problem and protecting its clientele from future defection.
It remains to be seen how users will respond as Netflix continues to adjust to shifting market factors, such as the launch of a $7 monthly package with advertisements. The increased price for non-subscribers is less than Netflix’s basic streaming plan, but it was implemented at a time when many Americans were cutting back on luxury purchases owing to soaring inflation.
Market participants have reacted warily to Netflix’s recent move, sending the company’s stock down 2% on Tuesday afternoon. Investors clearly still have faith in the streaming giant’s capacity to adapt to the ever-changing entertainment business, as Netflix’s stock price has increased by 20% this year.