Netflix is cracking down on password sharing by the start of 2023.
According to reports, the move will affect 100 million viewers. Insiders say the time has finally come as Netflix battles against disappointing subscriber numbers since its rapid growth during the Covid pandemic.
Password sharing has cost the company many subscribers, a source familiar with the issue told the Wall Street Journal (WSJ).
Co-CEO Reed Hastings told senior executives at a company gathering that password sharing has gone on too long and the pandemic only masked how bad it truly was, the source said.
Now the 100 million people who borrow passwords face missing out on their favorite shows on the platform, although sources told that Netflix is likely to introduce the ban with caution because it fears a backlash.
The exact policy and how it will be enforced remains unclear, but the company is expected to use IP addresses to track password sharing and shut it down unless consumers would like to pay an additional fee to share the password.
‘Make no mistake, I don’t think consumers are going to love it right out of the gate,’ Co-CEO Ted Sarandos told investors this month. He also reportedly said it was up to the company to make users see the value in the service.
The company also considered offering pay-per-view content, sources told, but then backed out of it over fears it would become too complicated for viewers. Its original idea to introduce it was to put pressure on account holders to not share their passwords over fears their loved ones would purchase a show on their credit card.
It reportedly axed the plan because it would make the platform too complicated for users.
Netflix, which has 223 million subscribers globally, will be the first to crack down on password sharing, but media executives don’t believe they’ll be the last to do it.
Netflix’s market cap is around $130 billion, but an analyst at Cowen Inc. estimated the company could generate an additional $721 million in revenue in the US and Canada.
Remmebr here one thing Netflix has not officially announced its plan to cut back on password sharing, nor has it set a price for consumers to add an additional household to their account.
