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Friday, March 29, 2024

Netflix: 100 million accounts shared passwords, plan to crackdown sharing

Netflix, the world’s largest video streaming company, has warned of a global ban on password sharing. It seems like a serious warning in this regard, and it could mean the end of a common practice of lending to a family member or friend – or to someone you know.

Netflix estimates that more than 30 million families in the US and Canada use a shared password to access their content. The company said more than 100 million families may use a shared password around the world.

In its quarterly shareholders’ letter, Netflix has deliberately approved the sharing of passwords outside the home because it has helped users to get more involved with the service. But with a competition from Disney, Warner Bros. Discovery, Paramount Global, NBCUniversal, Apple TV + and other broadcasters eating away at its growth, Netflix said it was looking for millions of homes that shared passwords to start paying.

“Our very high home penetration – which includes a large number of family-sharing accounts – combined with competition, creates tensions over revenue growth,” Netflix said in its letter. “Account sharing as a percentage of our paying membership has not changed much over the years, but, along with the first factor, means it is difficult to grow membership in many markets – a problem that was obscured by our COVID growth.”

Netflix reported losing 200,000 paid subscribers in the first quarter of March 31 – for the first time in more than 10 years Netflix lost subscribers during the quarter. The company has announced it will lose another 2 million subscribers in the second quarter.

The broadcast platform currently has 222 million subscribers worldwide. It is pleased with the growing growth during the epidemic, but that customer growth has slowed – and now has worsened – as the Covid-19 population detention has increased dramatically.


Planning Crackdown

Netflix has also lived to share the password because the company, according to founder and CEO Reed Hastings, “is doing well” without taking drastic measures.

“With regard to [password sharing], there are no plans to make changes there,” Hastings said in 2016. “Password sharing is something you should learn to live with, because there’s a lot of official password sharing, like sharing with your partner., And your kids …. so there’s no clear line, and we’re doing just as well as we are.”

Netflix has developed a consumer-friendly brand over the years, and allowing password sharing has helped with that image.

“Sharing can help us grow by making more people use and enjoy Netflix,” the company said in its shareholders’ letter. “And we’ve always tried to make sharing between family members easier, with features like profiles and more streaming.”

But times have changed. And when growth stops, attitudes often change.

Earlier this year, Netflix began exploring various ways to prevent password sharing in Chile, Costa Rica and Peru. Officials said in a telephone interview with the company on Tuesday that it could extend the model set to those countries, charging extra money for accounts sharing passwords outside the home.

Netflix has not yet released a viable global strategy yet but suggested that global change could come as early as 2023.

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