Netflix password sharing crackdown, too soon or delayed win?

Netflix Inc. announced it would tighten the rope on password sharing with an option for users to pay extra to share their account with people they live with.

Time line

While the proposed and subjectively daunting crackdown was expected to kick start in the first quarter of the year, the streaming service has delayed password-sharing changes until later this year.

Don’t get excited yet, as Netflix has in several other countries seen substantial growth as a result of the pulled plug to offload freeloaders.

Netflix reported revenue growth of $8.16 billion in new paid members joining the service.

This means while users resisted and left the streaming service, they came back to open their own accounts.

Paid membership grew in some markets as indicated in Netflix first quarter earnings of 2023.

Netflix reports that there are now substantial members although membership in Latin America fell by 400 000 since Netflix started testing paid sharing options in the region.

Countries testing paid sharing such as Chile Peru and Costa Rica are seeing minor monetary improvements despite minor challenges.

The plan to begin charging for password sharing in the US in the first three months of 2023 also seems to be as delayed as it is in the country.

While Netflix reported that more than 100 000 users benefitted from accounts they did not pay for, the shift for a crackdown projects long term results.

An advertising support tier is also a product the streaming service plans to implement as part of their plan to increase revenue.

Netflix plan

The plan is to have freeloaders paying for the service, which may result in short term losses and long term gains.

This means getting main account holders to pay to share their account which could translate to compounding desired growth.

Also read: Hidden detail behind load shedding stage 8 and Ramokgopa’s answer