January 25, 2023

Netflix has announced that its password sharing crackdown program will be officially launched soon.

While no date has been confirmed, Netflix stated that the password-sharing measures would be implemented later in the first quarter of this year, implying that they will be in place by the end of March.

Announcing its Q4 results, Netflix said it would roll out a paid option for those who want to share their accounts. “Today’s widespread account sharing (100M+ households) undermines our long-term ability to invest in and improve Netflix, as well as build our business,” Netflix said in a shareholder letter.

Executives explained in the letter that while some users are expected to cancel their accounts when paid sharing is launched, “borrower households” will create their own accounts. The details of how and how much the paid password sharing will cost have yet to be revealed.

The scheme was tested in parts of Latin and South America last year, but it was not well received by subscribers in both regions. Netflix’s efforts to entice users to sign up for its “add an extra member” feature did not help matters. The add-on, which allows customers to charge a small fee to add separate households and all of their occupants to their accounts, further complicated matters.

Despite the previous disappointment, Netflix appears unfazed, admitting that it learned from its experience in Latin America, where it has rolled out paid sharing, and that there will be “some cancel reaction in each market,” affecting 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,” it said.

The sources for this piece include an article in Forbes.