Netflix Preparing to Crackdown on Password Sharing

Netflix is preparing to crackdown on password sharing around the world after it lost over 200,000 subscribers. The company reported a quarterly subscriber loss on Tuesday, ending Q1 of 2022 with 221.64 million subscribers, down from 224.84 million in Q4 of 2021.

According to its shareholder letter, Netflix said that a large number of households around the world are sharing their accounts, which is a critical factor for “creating a revenue growth headwinds.” Netflix estimates that over 100 million households worldwide are using shared Netflix accounts, including more than 30 million in the U.S. and Canada.

“This is a big opportunity as these households are already watching Netflix and enjoying our service,” the company wrote in its letter. “Sharing likely helped fuel our growth by getting more people using and enjoying Netflix. And we’ve always tried to make sharing within a member’s household easy, with features like profiles and multiple streams. While these have been very popular, they’ve created confusion about when and how Netflix can be shared with other households.” the company added.

Netflix has begun testing a new feature that will charge users if they want to share their passwords with anyone outside of their households. The company has rolled out a pilot program for this feature in Costa Rica, Peru, Chile, where members on its standard and premium plans will be able to add two additional members to the account for an extra cost.

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