It looks like the days of sharing your Netflix Inc (NASDAQ:NFLX) account with friends and family outside of your household may be numbered.
The online streaming giant has confirmed that it is planning to crack down on password sharing in the near future.
In a letter to shareholders, Netflix said: “Today’s widespread account sharing (100M+ households) undermines our long-term ability to invest in and improve Netflix, as well as build our business.”
The company has not yet confirmed a date for the new measures to come into effect, but it has stated that they will be implemented later in the first quarter of this year, which suggests that they could be in place by the end of March.
While the cost of the new password-sharing option has not yet been announced, it is currently offered in some markets for $3, which is a lot cheaper than buying two separate accounts.
This is not the first time that Netflix has addressed the issue of password sharing. Late last year, the company announced its plans to crack down on the practice, but it did not provide a specific date for when the measures would be put in place. However, it seems that Netflix is determined to put an end to the widespread sharing of accounts, as it collects vast amounts of user data and can detect password sharing through IP addresses, device IDs, and account activity.
It’s worth noting that Netflix has already rolled out a paid sharing option in Latin America, and while the company acknowledges that there will be some cancel reactions in each market, it expects to see improved overall revenue in the long term.
Netflix also launched an ad-supported tier last year, which hasn’t been as popular as the company had hoped. However, the streaming giant believes that branded television advertising is “a substantial long-term incremental revenue and profit opportunity for Netflix”.
While the impact on 2023 will be modest, as the ad-supported plan builds slowly over time, Netflix is facing some tough competition from rivals.