Watch out, freeloaders: Netflix is cracking down on password sharing.
The streaming giant dropped the bombshell that CEO and co-founder Reed Hastings is leaving, and immediately followed it up with news that it would crack down on “borrowing” its service in the United States.
“Today’s widespread account sharing (100M+ households) undermines our long-term ability to invest in and improve Netflix, as well as build our business,” the company wrote in a letter to shareholders.
To rephrase: sharing is not the same as compassion.It’s true that Netflix has stated that widespread account sharing is to blame for the service’s dramatic decrease in subscribers over the past year.
From now until March, Netflix will only allow accounts to be shared internally among members of the same household, rather than with anyone outside of that home. Sharing with non-household members will incur an additional cost for account holders.
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Further layoffs have been announced by Netflix
- The fate of my subscriptions depends on how people feel.
- The more stringent policy has been tried and tested with positive results in Latin America.
- However, they acknowledge that the decision to restrict subscriptions to households will result in some cancellations in the short term based on that experience.
There will be “some cancel reaction in each market when we roll out paid sharing,” the letter to shareholders states.
Newly appointed co-CEO Greg Peters, along with Ted Sarandos, braced for customer backlash in today’s earnings call.He warned that the decision “will not be universally popular.”
However, the company is confident that hits like Stranger Things and Megan will ultimately win over audiences.A “must-see” quality is what will make the paid sharing initiative successful, according to Sarandos.