The American subscription video on-demand over-the-top streaming service and production company Netflix has announced to crack down harder on paid password sharing later in the first quarter of 2023 which began in January this year.
After witnessing a difficult last year (2022), Netflix has announced that it will work ahead with new models like paid password sharing, along with advertising offerings in the ongoing quarter.
The OTT service provider has been long aware of the password sharing among peers and the supposed ‘freeloaders’ on the platform.
However, now that its revenue has been hit, the company is looking to put a stop to the password sharing activity in select countries, fully aware that even though the initiative could lead to some ‘cancel reaction in the market’, it will eventually result in improved overall revenue.
As Netflix will roll out paid sharing, members in many countries will also have the option to pay extra if they want to share their passwords with people they don’t live with.
“From our experience in Latin America, we expect some cancel reaction in each market when we roll out paid sharing, which impacts near term member growth. But as borrower households begin to activate their own standalone accounts and extra member accounts are added, we expect to see improved overall revenue, which is our goal with all plan and pricing changes,” the company said in a letter to its shareholders.
The announcement comes at a time when the company’s top management is witnessing a shuffle.
Reed Hastings, the co-founder of Netflix for 25 years, is stepping down as the company’s co-CEO to hold the position of the executive chairman, while Greg Peters, the chief operating officer and chief product officer of Netflix has been promoted as the co-CEO of the company, along with Ted Sarandos.
“We start 2023 with renewed momentum as a company and a clear path to reaccelerate our growth. I’m thrilled about Ted and Greg’s leadership, and their ability to make the next 25 years even better than the first,” said Hastings.