Netflix password-sharing ban goes international
3 Min Read
Netflix has made its crackdown on password-sharing international after pledging to roll it out months ago.
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The Netflix logo is displayed on the company's website on February 2, 2023, in New York (AP)
In an effort to boost income at the top streaming television provider, Netflix on Tuesday tightened its enforcement of customers who share passwords with persons other than their immediate family.
"A Netflix account is for use by one household," the company said in a statement.
Netflix said early this year that more than 100 million households were sharing accounts, "impacting our ability to invest in great new TV and films."
The company tried to mitigate the issue with "borrower" or "shared" accounts in a few markets, which allows subscribers to add extra users for a higher price or transfer viewing profiles to separate accounts, though it seems that the idea did not take off.
On Tuesday, Netflix announced that it was expanding the policy to more than 100 countries.
As Netflix's growth slowed last year, the Silicon Valley-based streaming service set out to encourage users who were using shared passwords to view the content for free to start paying for the service without alienating current members.
"This account sharing initiative helps us have a larger base of potential paying members and grow Netflix long term," co-chief executive Ted Sarandos said on an earnings call.
Recently, Netflix disclosed to financial analysts that it has postponed a wide crackdown on account password sharing "to improve the experience for members."
In April, Netflix said that its subscriber base reached a record high of 232.5 million in the first three months of the year and that its newly launched ad-supported tier was doing well.
The business claimed to have more than 5 million members in its ad-support tier in a recent presentation to marketers.
While Netflix's new ad-subsidized membership tier is still in its early stages, engagement has exceeded expectations, with "very little switching from our standard and premium plans," according to the streaming company.
Insider Intelligence predicts that Netflix's new tier will generate $770 million in ad revenue this year, rising to $1 billion the following year.
Insider Intelligence suggested that for the first time ever, US consumers will spend more time this year watching digital video on platforms such as Netflix, TikTok, and YouTube than watching traditional television.
The market researcher predicted that, for the first time, "linear TV" will account for fewer than half of daily viewing.
"This milestone is driven by people spending more and more time watching video on their biggest and smallest screens, whether it's an immersive drama on a connected TV or a viral clip on a smartphone," said Insider Intelligence chief analyst Paul Verna in a statement.
Netflix and YouTube are "neck and neck" in terms of digital video viewer interest, it added.
