Global Courant 2023-05-24 00:41:02
Netflix on Tuesday outlined how it plans to tackle rampant account password sharing in the US, the latest bid to win more subscribers to its video streaming service as growth slows.
To combat password sharing, Netflix said it will limit US viewers of its shows to people living in the same household. Those who subscribe to Netflix’s standard or premium subscriptions — which cost $15.50 to $20 per month — can allow another person living outside their household to use their password for an additional $8 per month. month, a $2 discount from the company’s basic standalone basic plan.
Without giving details on how it verifies subscriber identities or accounts, Netflix assured that anyone living in the same household of a US customer can still stream TV shows and movies “wherever they are – at home, on the road, on vacation. The Los Gatos, California-based company has approximately 70 million U.S. account holders.
Telegraphed by Netflix a year ago, the much-anticipated move seeks to end a practice that the company let go unchecked for years as its streaming service attracted subscribers in droves. At the time, management had little incentive to risk pissing off customers by curbing password sharing.
While Netflix looked the other way, an estimated 100 million people worldwide were given passwords by family and friends to freeload on Netflix TV shows like “The Crown” and movies like “All Quiet On The Western Front.” Those passwords were funneled through Netflix’s 232.5 million global paying subscribers, who generated the majority of the company’s $32 billion in revenue last year.
But after a year of moderate subscriber growth, including the biggest customer losses in more than a decade, Netflix is putting its foot down.
In February, it began blocking free viewers in Canada, New Zealand, Portugal and Spain, following similar moves in Latin America.
Before the crackdown on password sharing began, Netflix started introducing features such as the ability to transfer the profiles set up on subscriber accounts to make it easier for people to keep their viewing history after they no longer watch for free. to watch programmes.
Netflix’s attempt to force more of its viewers to pay for access to its programs follows the launch of a $7-per-month subscription, which saw commercials included in the service for the first time. Netflix has attracted an additional 9 million subscribers worldwide since the ad-supported option debuted, though not all subscribers signed up for the low-cost plan.
While the new US surcharge for viewers who live outside the subscriber’s household is lower than Netflix’s base subscription, it comes at a time when Americans have reduced their discretionary spending due to high inflation. That inflationary pressure, combined with increased competition from other streaming services, is one of the main reasons why Netflix has experienced a slowdown in growth.
Netflix co-CEO Greg Peters acknowledged in January that the crackdown on password sharing could see more subscriber cancellations.
“It’s worth noting that this won’t be a widely popular move,” Peters advised investors. Any churn in the US would deepen the erosion that took place in a region where Netflix lost about 920,000 subscribers last year.
Shares of Netflix fell 2 percent in Tuesday afternoon trading, but the share price is still up about 20 percent year-to-date.
