Netflix has confirmed that it will begin cracking down on password sharing before the end of 2022.
It was previously reported that the streaming giant was trying to add an extra to any household watching Netflix content using another household's account, but new reports have now confirmed that it will roll out to all territories where Netflix operates.
In a letter to shareholders as part of first-quarter results in April, executives at the streaming giant said about 100 million households shared a password with another account. So even though Netflix has 221 million paid subscribers, the actual number should be much higher.
As a result, Netflix tested a system in Chile, Costa Rica and Peru where an additional €2.99 was added to accounts that wanted to share their credentials outside the home.
The lawsuit must have been a success, as The New York Times reports Netflix executives told employees they will begin cracking down on password sharing in the last three months of 2022, as early as October.
The news comes as Netflix struggles to boost revenue after a horrible period in the company's history.
On April 21, news broke that the streamer had lost 200 subscribers since the beginning of 000, and as a result, Netflix's value had shrunk by more than €2022 billion. Netflix subsequently canceled a number of shows, shelved numerous projects in development, including one for Prince Harry and Meghan Markle, and shut down Tudum, its publishing presence.
A series of austerity measures, now accompanied by the announcement of the end of password sharing.
What does this mean to me?
Simply put, if you share your Netflix account with someone outside of where you live, it will cost you more. You can split an account with a partner you don't currently live with or with your parents while you were studying, or maybe split the fee with a group of friends. Now it will cost you to do it.
It will also be a nuisance for many people. If you have children who regularly stay with the grandparents, you may have to pay more to have Netflix on a device in your home.
With revenues dwindling due to the cost of living crisis, this supplement will likely convince many Netflix subscribers to ditch the service altogether. Streamer executives will have probably bet that a few extra paid subscribers are worth the inevitable backlash.
Analysis: Why is Netflix doing this?
As Netflix continued to grow and its stock price rose, there was no reason for the company to do anything that would make it unpopular with subscribers, but now it needs cash.
Amid increased competition from other streaming services like HBO Max, Hulu, and Disney Plus, not only has the race to grow their subscriber base become more difficult, but these services, which are backed by streaming giants , are now hoarding your content. forcing Netflix to pour more and more money into making its own movies and shows.
Amid a slew of cancellations and layoffs, Netflix is tightening its belt internally, but it's clearly not enough. As we said before, this decision will irritate people, especially at this time, and many subscribers will cancel, but if the change generates more revenue for the company and Netflix can once again boast of increasing the number of subscribers in 2023, company executives they will consider it a worthwhile gamble.