Netflix Will Be Cracking Down On Shared Passwords
Netflix suggested this week that a global crackdown on password sharing could be quickly approaching, charging users a fee for sharing their accounts outside of their household. Per NBC News, there are more than 100 million households that use Netflix but do not pay for it, the company said in a letter to shareholders on Tuesday (April 19).
Netflix admitted it has allowed users to share their passwords because it got more people hooked on its platform, but heightened competition from other streamers (HBO Max, Amazon Prime Video, Hulu, Disney+ and others) has made it that much harder for the company to increase its membership base. Last month, Netflix announced it would begin testing ways to make users in Chile, Costa Rica and Peru who share passwords pay a fee for the additional members. This model could expand to other countries, executives said during the company’s earnings call on Tuesday, but it was unclear when those changes would be in effect.
Per CNN, Netflix ended the first three months of 2022 with 200,000 fewer subscribers and lost 700,000 subscribers in early March after its decision to suspend service in Russia after the country invaded Ukraine.
As we earlier reported, Netflix’s plan to increase subscribers is to offer a cheaper, advertising-supported plan, which its competitors already offer. Additionally, Netflix said it would also be “pulling back” spending on its films and TV shows to make content that resonates with its viewers. At $17 billion annually, Netflix currently spends more on content than any of its competitors.
“We’re pulling back on some of our spend growth across both content and noncontent spend,” CFO Spencer Neumann said. “We’re trying to be smart about it and prudent in terms of pulling back on some of that spend growth to reflect the realities of the revenue growth of the business.”