- Netflix plans to charge account holders extra for each “sub-account,” or shared user, to make up for lost revenue.
- The new pricing plan is expected to roll out globally in 2023.
Netflix currently has 222 million subscribers worldwide and an estimated 100 million additional households are using the service through a shared password.
It is something that until now had not mattered too much.
You only have to see a tweet from 2017 where the streaming giant even encouraged this practice, but now, coupled with the loss of subscribers in its last quarter – the first time in the last decade – and the drop in revenue, it seems that Netflix wants to do away with password sharing .
Love is sharing a password.
— Netflix (@netflix) March 10, 2017
In March of this year, the streaming platform began testing a new feature in Chile, Costa Rica and Peru that allows adding accounts for up to 2 people who do not live in the same house for an additional monthly charge .
Ultimately, this results in the account holder having to pay extra for each “sub-account” or shared user to make up for lost revenue.
“If you have a sister, say, who lives in a different city, and you want to share Netflix with her, that’s great,” said Greg Peters, Netflix’s chief operating officer, during the earnings call.
“We’re not trying to shut down that exchange, but we’re going to ask you to pay a little bit more to be able to share with her and to get the benefit and value of the service, but we also get the revenue associated with that viewing,” he adds.
Netflix has not made it clear how much revenue it expects to generate by implementing this strategy, but it has given a possible date to launch its plan to end shared accounts .
According to Peters, it looks like this new course will begin rolling out globally in 2023 .
” We’re trying to find a balanced approach ,” explains Greg Peters. “To set your expectations, I think we’re going to spend a year or so iterating and then implementing all of that so we can launch that solution globally, including markets like the United States.”
“As we work to monetize the exchange, [average membership income] growth, revenue and viewing will become more important indicators of our success than membership growth,” Peters said in the letter to shareholders. .
What is really striking, as can be seen from a Time2Play study echoed by CNBC , is that this seems to be the only solution that the streaming giant has to end shared passwords.
The survey indicates that about 80% of Americans who use someone else’s password would not create their own account , so there would be no addition of new users by removing this option completely, so unless with this practice yes they would see benefit.