We’ve known that Netflix wants to crackdown on its users who share passwords for some time, who are skirting the subscription fee. The Wall Street Journal reports that the Netflix crackdown on password sharing will begin in early 2023. The new changes will start rolling out in the United States in January, and roll out to other regions in due time.
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As has been widely reported, Netflix went through some tough times in 2022 after massive growth stemming from the global pandemic and subsequent lockdowns. The company saw its first decrease in subscription numbers in its history, and fingered these password sharers as one of the main reasons. Netflix was already planning on rolling out these kind of changes way back in 2019, but decided to delay since it was seeing massive growth in 2020.
According to the Wall Street Journal report, more than 100 million Netflix viewers access the service by borrowing password. Seeing that Netflix has less than 250 million active subscriptions, it means the company is potentially losing up to 20 percent in revenue. A small percentage of users also use stolen passwords, hacked and sold on the black market.
In the past two years, Netflix has developed several features hoping to offer subscribers a better experience than password sharing — for an additional fee. Since March 2022, Netflix has been testing the ability to create sub-accounts in Chile, Costa Rica, and Peru.
These sub-accounts allows users to pay an additional fee for an add-on account for family or friends at a fraction of a Netflix Standard subscription. Each sub-account gets its own password, avoiding the potential problems of sharing a single password among several users.
In these countries the sub-accounts cost around a quarter of the standard Netflix subscriptions (varying slightly from country to country), which would translate to a cost of about R40 per additional sub-account in South Africa.
“We are going to offer the ability for borrowers to transfer their Netflix profile into their own account, and for sharers to manage their devices more easily and to create sub-accounts, if they want to pay for family or friends,” Netflix said in its quarterly results presentation in October.
