In March 2017, when password sharing was introduced, Netflix did so by tweeting, “Love is sharing a password.”
The streaming giant has decided to go back on its word and will start cracking down on subscribers who share accounts with friends and family, as there are over 100 million non-paying households with full access to the platform.
Instead, it will implement a system that will make users pay for sharing their passwords outside of their primary subscription account.
You might be wondering how Netflix will be able to execute this crackdown. The company is planning to do this in a gradual, non-threatening way through IP address tracking, the use of validation codes, and more.
In the first quarter of 2022, Netflix was down by over 200,000 paid subscribers, which the company has tried to grow back since then.
Although the company is renowned in the video streaming industry, it has been trying to combat losses for the past year, as analysts say that password sharing has cost the company over 1 billion dollars. They are trying to recuperate by adding various services to the platform, such as games and a low-cost ad-supported membership plan that goes for $6.99 a month.
Still, all ideas have proven unsuccessful as the gaming sector has low user interaction, and the ad-supported membership is the least popular plan, with only about 9% of the total membership.
Netflix’s main goal with this move is to maximize subscribers, as users that are used to sharing will have no other choice but to either get a subscribed account or pay the additional fee of $3.99 needed to share the password of a friend or family member in order to continue gaining access to the platform and the thousands of movies and shows it has to offer.
This idea does not sit well with many users, and the Co-CEO of Netflix, Ted Sarandos, affirmed that saying, “Make no mistake, I don’t think customers will like it out of the gate,” which he told investors earlier in December. In order to keep the company running smoothly with an increasing gross profit, this move is a necessity, as we all know that the Netflix franchise is a business that provides services, and consumers are willing to pay to gain access to that service and help the franchise grow.
What is your take on this big decision? Will it help the company grow and gain more subscribers, or will it cost the company in the long run?
Let us know your thoughts in the comments.
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Photo by Thibault Penin
