Netflix to crack down on password sharing: What you need to know
Are you still sharing your Netflix password with people who don’t live with you? You won’t be able to do so for much longer.
According to Netflix’s Q1 2023 shareholder letter, the popular streaming service will soon begin a “broad rollout” of its plan to crack down on password sharing in Q2 2023. In other words, anyone who is using a friend or family member’s Netflix account without actually living in the same household will no longer have access to that account after June 30th.
This announcement comes a few months after Netflix tested out its password sharing crackdown plan in Canada, New Zealand, Spain, and Portugal in Q1 2023. As with its trial in Latin America in 2022, many users in these four countries cancelled their subscriptions once Netflix’s password sharing clampdown scheme was introduced.
Netflix says it experienced an increase in new subscribers who are paying for their own accounts, as well as a rise in the number of people signing up for their “extra members” subscription package (which we explained in our article about how Netflix plans to prevent password sharing), after the initial outrage had subsided. Netflix considers these trials to be very successful and believes that they have given them the confidence to implement the scheme worldwide.
We have previously reported on Netflix’s efforts to prevent password sharing across different households. In April 2022, we disclosed Netflix’s strategy to make money from account sharing, as the streaming service wanted to expand its revenue sources after facing financial challenges in the first quarter of 2022.
Netflix has been providing regular updates to both its shareholders and customers about the implementation of its password sharing plan. Initially, Netflix was expected to announce its timeline for the crackdown by the end of 2022. However, in January, they postponed the deadline to the end of Q1 2023. Currently, Netflix has delayed the implementation of its strategy once again, and is aiming to roll out its crackdown plan by the end of the current quarter.
Despite Netflix delaying the implementation of its password sharing crackdown twice, it’s uncertain whether the company will actually put an end to password sharing before June ends. However, since Netflix plans to launch its crackdown strategy broadly in Q2 2023, it is possible that the new measure will be introduced before June 30th. As a result, viewers should anticipate the possibility of having to pay more or sign up for an account to continue watching the top-rated shows and movies on Netflix.
Latest New Netflix features to soften the blow
As per Netflix’s explanation, the introduction of its password sharing crackdown plan might not be well-received by existing users, particularly those who have been using another person’s account for free. However, Netflix is counting on new features to attract users to its cheapest subscription plan, which is supported by ads. The company has promised to expand this tier following its slow uptake, and hopes that these additions will encourage new users to sign up for their own accounts instead of relying on someone else’s.
In Netflix’s Q1 2023 shareholder letter, the company disclosed that it will be enhancing the feature set of its ads-based subscription plan in the next few weeks. So, what’s new for subscribers on this plan? Essentially, they will now be able to stream videos in higher quality – from 720p to 1080p – and concurrently on two devices instead of one. These features were made available to ads-based tier subscribers in Canada and Spain as of April 18th, and will soon be rolled out to the other 10 markets that support ads-based subscriptions.
Netflix is evidently attempting to attract new users to its cheapest subscription tier by introducing these new and seemingly impressive features. Given the rise in sign-ups it has witnessed in Canada and Spain recently, and the fact that Netflix is disincentivizing users from signing up to its ad-free basic tier, this strategy could be effective in other markets like the US and UK, particularly once its password sharing crackdown plan is rolled out globally.
It’s important to note that there’s no certainty that Netflix’s strategy will be successful, particularly given that other streaming services such as Hulu, Disney Plus, and Paramount Plus may offer more value for money depending on the subscription tier chosen. Additionally, the newly announced super streamer Max by Warner Bros. Discovery, which will be launching on May 23, may be a more financially viable option for streaming enthusiasts in markets where it will be available. For more information on Max, you can read our article “7 things HBO Max fans need to know about Max.”
Netflix is banking on its new strategies to give it an edge in the ongoing competition to become the leading streaming service, but only time will tell if they will be successful. To learn more about Netflix, check out our detailed guide on password sharing, find out when Netflix will stop shipping DVDs, or discover how to sign up for a subscription if you’re interested in getting one.
