Although Netflix is putting an end to password sharing, this could present difficulties for both users and the streaming service. By requiring users who share accounts to pay, Netflix has announced that it will end password sharing as of 2023. Early in the year, according to the corporation, the adjustment will start to be implemented in the United States.
According to rumors, the streaming service has acknowledged password sharing as a big problem that will harm subscriptions in 2019, but it was unsure how to fix the problem without upsetting users. Then Covid lockdowns happened, which caused a surge in new members, and the plan to properly control sharing broke. Despite mounting subscriber losses, Netflix didn’t start acting on a plan to severely restrict the practice until this year.
According to reports, Reed Hastings, Co-Chief Executive, warned senior executives at a corporate conference outside of Los Angeles in the early months of this year that the epidemic boom had obscured the severity of the password-sharing problem and that they had put off fixing it for too long. More than 100 million Netflix subscribers used passwords they obtained from friends or relatives to access the service, according to a report released by Netflix earlier this year.
As a result of the crackdown, Netflix appears to be in danger of losing the years of flexibility that the platform has provided to its users because more people may switch to competing streaming services.
In the beginning of December, Ted Sarandos, co-CEO of Netflix, told investors: “Make no mistake, I don’t think customers are going to adore it right out of the gate. It’s up to the firm to make sure people see value in paying for the service.”
After years of opposition, Netflix has changed its stance on including advertisements in its content. In November, a $6.99/month ad-supported tier was introduced with the intention of luring in new customers searching for a deal on more expensive ad-free subscriptions.
Netflix’s terms of service, on the other hand, have long since changed. Instead of the account owner being prohibited from sharing passwords—a rule that was never strictly enforced—the company updated its customer help pages this year to state that accounts should only be shared by residents of the same household. According to the business, its policies would be applied based on IP addresses, device IDs, and account behavior.
There are rumors that Netflix has explored progressively increasing the burden on password sharing in order to reduce consumer backlash. Product leaders advised against overly complicated and unwelcoming services.
Due to the possibility of users becoming suspicious of disclosing their login information to third parties who might run up their bills, Netflix contemplated allowing users to rent pay-per-view video through their memberships, similar to what Amazon Prime Video subscribers can do. It is also made known that the business chose against that strategy, in part because product executives thought it would compromise the service’s simplicity.