Official Announcement of Netflix’s Extra Charge for Password Sharing
Netflix, the leading global streaming platform, has officially unveiled its strategy to mitigate rampant password sharing among users in the US. This move aims to attract more subscribers and counter the company’s recent slowdown in growth. Displayed prominently on Netflix’s website since February 2, 2023, this policy change was publicly outlined on May 23, 2023.
Strategy to Limit Password Sharing
Initiating a plan first announced over a year ago, Netflix is moving forward with measures to limit password sharing strictly to those residing in the same household. To accommodate users outside of the household, the streaming service is introducing an additional $7.99 per month charge. Alternatively, Netflix encourages these users to create their own accounts using the ‘transfer profile’ feature.
Emails Sent to Out-of-Household Users
Out-of-household users should have started receiving emails regarding this change starting from Tuesday, according to the company. Netflix reassures that users from the same household will still retain account access while traveling or on the move.
Consumer Response to the Password Sharing Crackdown
Despite the company’s explanation that unrestricted account sharing was hampering their ability to invest in new content, the announcement has garnered negative responses from many subscribers. Social media users expressed their frustration, with some even considering cancelling their subscriptions due to this change.
Password Sharing Statistics and Global Tests
With over 100 million households reportedly engaging in password sharing and a total of 232.5 million subscribers as of April, this change could significantly impact Netflix’s user base. Prior to this US rollout, Netflix trialed paid password sharing in several international markets such as Chile, Costa Rica, and Peru in 2022. The company also expanded its paid account sharing to Canada, New Zealand, Portugal, and Spain earlier this year. According to a recent shareholders’ letter, these tests yielded positive results.
Anticipated Effects on Membership and Revenue
Despite expecting initial subscriber loss due to the announcement, Netflix predicts increased acquisition and revenue as users activate their own accounts or add ‘extra member’ accounts. As per the shareholders’ letter, Netflix reported $8.2 billion in revenue,
