Netflix is about to take what sounds like a major step in ensuring that everyone who is using its streaming service is actually paying for it. According to the company’s latest letter, sent out to shareholders as part of its Q4 2022 earnings report, Netflix will be rolling out paid sharing “more broadly” by the end of Q1 2023, implying a stronger enforcement of password-sharing rules. Critics say they’re confused as to how Netflix will accomplish this, but the company previously tested a feature in which users in select South American regions would be prompted to pay for an extra sub-account if they were caught sharing.
From a Netflix letter to shareholders:
Later in Q1, we expect to start rolling out paid sharing more broadly. Today’s widespread account sharing (100M+ households) undermines our long term ability to invest in and improve Netflix, as well as build our business. While our terms of use limit use of Netflix to a household, we recognize this is a change for members who share their account more broadly. So we’ve worked hard to build additional new features that improve the Netflix experience, including the ability for members to review which devices are using their account and to transfer a profile to a new account. As we roll out paid sharing, members in many countries will also have the option to pay extra if they want to share Netflix with people they don’t live with. As is the case today, all members will be able to watch while traveling, whether on a TV or mobile device.
As we work through this transition – and as some borrowers stop watching either because they don’t convert to extra members or full paying accounts – near term engagement, as measured by third parties like Nielsen’s The Gauge, could be negatively impacted. However, we believe the pattern will be similar to what we’ve seen in Latin America, with engagement growing over time as we continue to deliver a great slate of programming and borrowers sign-up for their own accounts.
Netflix has been priming users ahead of its password crackdown in recent months, having launched a new Profile Transfer feature in October that lets people using someone’s account to more easily keep their viewing history, settings, and more in the event that they decide to get their own subscription, as referenced in the streamer’s letter. November also saw the release of Managing Access and Devices, a new feature that allows users to easily view recent devices that have streamed from their account and to log them out with one click. It can be found in Account Settings.