In a letter to its shareholders, Netflix He admitted that he publicly allowed everyone to do so Share your passwords To use the platform outside the home. The company estimates that 100 million subscribers engage in this malpractice and has promised to end it and start global action once 2023 begins.
Netflix lost 200,000 subscribers in the most recent quarter, according to its latest earnings report. Shares are already down more than 30% this week.
Most specialists refer to this phenomenon as the end of the “boom” in the flow of content consumption brought on by the pandemic. Recently, consultancy Kantar found that UK households are “cleaning up” subscriptions, canceling services like Netflix, Amazon Prime, Disney+ or HBO Max, due to their household spending rationalization.
But Netflix is targeting another reason for negative subscriber growth: password sharing outside the home.
In the US and Canada alone, 30 million subscribers incorrectly share passwords, and it is estimated that the number rises to 100 million households worldwide.
Netflix co-founder Reed Hastings admitted that the company allowed this behavior without strict action. He argued that this “likely helped fuel the growth of the platform by getting more people to use and enjoy Netflix.”
She identified this practice as inappropriate when used outside the home, but legitimate when classifying family members and using it within the same roof.
When will Netflix stop participating?
But that is about to change and the video streaming company has announced the launch of a global strategy against password sharing outside the home. And while it didn’t elaborate on what these changes would include, Netflix estimated they would arrive as soon as 2023, according to information revealed by CNBC.
In Chile, Costa Rica and Peru, Netflix is already running a beta program to charge users an additional $3 fee for sharing their accounts with profiles living outside the same home. This could be extended to other countries in the world with the intent of generating more income and getting back on the growth path.
Another strategy that Netflix could soon follow is to launch a cheaper subscription, but with ads. It wouldn’t be the first streaming company to try, as Disney+ recently made an announcement in the same vein.