For Netflix, the largest streaming company globally, the writing seems to be on the wall. The company has finally decided to get cracking on one of its biggest problems: over 100 million households share passwords of their Netflix account.
After it was announced that Netflix lost about 200,000 more customers than it had managed to acquire in the last quarter. They are projecting to lose another 2 million subscribers in the next quarter, and the streaming giant’s shares dropped by almost 40 percent.
This loss of paying customers has been further exacerbated by several other players, namely Amazon Prime Videos, Disney+ (Disney+Hotstar in India), and AppleTV+, which have taken a sizeable portion of Netflix’s userbase.
Several reports also claim that Netflix may be contemplating opening up its services to advertisers and will start a new, lower-priced tier supported by advertisements from other brands.
Netflix acknowledged that it had intentionally been generous with households sharing passwords to get more people hooked on its services in its quarterly shareholder letter. It wants families where passwords are shared to start paying up.
To that effect, Netflix will be introducing some sweeping changes in its pricing policies. It will present a different set of plans where users will be allowed to share passwords with a limited number of people for a price.
Earlier this year, Netflix started testing various systems and ways to crack down on password sharing in Chile, Peru & Costa Rica. Most of these systems included setting up new, slightly more expensive plans that allowed users to share their passwords outside of the home. They also started using pop-up notifications to warn users of the upcoming changes in prices in the United States & Canada, where they have over 30 million households using a shared password. The pop-up notifications warn users that they will be charged more for sharing their passwords out of the home.
Although Netflix doesn’t have a concrete global strategy yet, industry experts believe they will be using the same approach that they have deployed in the South American countries; worldwide a. These strategies will be implemented by 2023 across various stages.