By March, Netflix will begin its crackdown.
Netflix will begin its crackdown on password sharing within the next couple of months. In a note to its shareholders, Netflix said it believed more than 100 million households were sharing a password with someone they don’t live with (Netflix has 231 million paid subscribers). Netflix will now give users the option to pay extra to share their Netflix account with people they don’t live with. Based on results of a trial in Costa Rica, Chile and Peru, the company says it expects to lose viewers in the short term but increase revenue over time.
What does this mean?
Netflix’s statement to shareholders acknowledged 2022 had been a “tough year” for the company with “a bumpy start but a brighter finish”. Netflix lost more subscribers than it gained for the first time in a decade at the beginning of 2022. It also launched a cheaper subscription option with ads. “We continue to operate in a highly competitive market… beyond our direct streaming competitors, we also vie for consumers’ time against linear TV, YouTube… TikTok, and gaming… it’s not easy to build a large and profitable streaming business,” the statement read.