We all have enjoyed watching interesting shows on Netflix and most of us never had a personal account because we were dependent on the password sharing feature of Netflix. But if some rumors are to be believed, Netflix is planning to put a stop on their password sharing privilege completely. But the streaming service seems to be hesitant to make moves due to the fear of alienating subscribers.
But it seems 2023 is the year they will make the move and they are taking this decision due to the subscriber losses. Anyone who wants to access Netflix will have to pay for it.
According to estimates put forward by the company, over 100 million Netflix viewers watch shows and movies on the streaming service app or website using passwords borrowed from friends and family. This arrangement will be put to an end starting in 2023. The United States may be used as the testing ground for the decision.
Netflix has started testing their feature of additional fees for password sharing in a few Latin American countries and they are charging around $3 extra. Under this arrangement. now the actual subscriber in these countries will have to provide a verification code to anyone outside the household wanting to access the account.
As per the plans, Netflix may charge the account sharers a fee that’s slightly below the $6.99 ad-supported plan, so that the borrowers sign up for their own subscriptions rather than sharing the account of their friends and family. Netflix will use IP addresses, device IDs, and account activity to make sure that people aren't sharing the passwords.
Netflix has known it for long that their password sharing feature is a reason for their low profits but they were hesitating in executing the decision since this would make the customers angry. Then the company ignored the problem after pandemic struck, leading to a surge of subscribers in 2020.
Netflix announced in its Q1 2022 earning report that it lost 200,000 subscribers due to fierce competition and the war in Ukraine. The loss of 700,000 subscribers was one of the reasons they suspended services in Russia. The second quarter was even worse, with the company losing nearly 1 million subscribers, the biggest loss in company history. Following the report, Netflix’s stock tumbled 26%, erasing about $40 billion of stock market value.
Though the third quarter of 2022 brought the news to the company reporting the addition of 2.41 million global subscribers. However, Netflix CEO Spencer Neumann, said during the company’s earnings call that they’re “still not growing as fast as they’d like,” which brings us to the decision to kill password sharing.