Netflix Plans "Broad Rollout" Of Password-Sharing Crackdown In Q2 2023
After initial succession in four countries, the streaming giant says the policy will launch in the US and elsewhere soon.
Netflix has announced its intention to implement a "broad rollout" of its paid-sharing plan in the second quarter of 2023, including in the United States, as part of its efforts to crack down on password sharing outside of households. The announcement was made in the company's first quarter 2023 earnings report, where Netflix revealed its satisfaction with the results of the plan's initial launch in four countries.
The four markets where Netflix has already introduced the paid-sharing option are Canada, New Zealand, Portugal, and Spain. In February, Netflix introduced the "buy an extra member" feature in these countries, allowing primary account holders to pay an additional monthly fee for a sub-account that can be used by 1-2 people who do not live with them.
Netflix has been explicit in its guidelines that an account is intended to be shared within one household, which is defined as people who live in the same location as the account owner. The company has stated on its customer-help section of the website that individuals who are not part of the account owner's household should sign up for their own account in order to access Netflix content. However, Netflix members are still allowed to access the service while traveling using their personal devices or by logging in to new TVs, such as those in hotels or vacation rentals.
One year ago, Netflix estimated that password sharing was taking place in violation of its rules in over 100 million non-paying households worldwide. This prompted the company to focus on generating revenue from password-sharing users by implementing the paid-sharing plan. Netflix has acknowledged that this move may not be universally popular and could result in an increase in cancellations.
The company's co-CEO, Greg Peters, had acknowledged during the Q4 2022 earnings interview that the crackdown on password sharing may lead to an uptick in churn. However, Netflix remains committed to addressing the issue and converting password-sharing users into paying members in order to protect its revenue and ensure fair usage of its service.
The specifics of the paid-sharing plan, including pricing and implementation details, are yet to be disclosed, and Netflix will likely closely monitor the results of the rollout to assess its impact on subscriber growth and revenue.
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