Wall Street Times

Netflix: Password sharing will end in 2023

Image Source: Bloomberg

As Christmas, the end of the year, and 2023 get closer, many people worldwide hope that the next year will be better. And just like regular people make plans for how they want their lives to go in the new year, so do businesses.

As part of its plans for 2023, the streaming giant Netflix has said that it will stop letting people share their passwords in the days and weeks after December 31.

This has been a challenging year for Netflix. The streaming service went through many ups and downs after the mega-boom and the long COVID months. In the first three months of 2022, many people who had signed up to attend left. Part of this was that people spent less time at home. Since then, the company has been trying to figure out how to get more people to sign up again.

One idea was to stop letting people share passwords, and The Wall Street Journal says the plan may be implemented very soon. The streamer plans to set up systems that will only let subscribers share their Netflix passwords with devices outside their homes if they pay to do so.

The plan is already being tested on the streamer’s version for Latin American countries. It has validation codes on pages where you sign in and allows you to add a second user.

How could the plan work in the U.S. and elsewhere? But Netflix has also tried other things to sign up more people. For example, in November, the streamer started offering a cheaper plan that included ads. But a recent report says that other options on the platform are more popular than this one.

Even though it’s not clear how much Netflix plans to charge for shared accounts, it is clear what their end goal is. Since users won’t be able to share passwords for free anymore, they will have to pay more or sign up for a subscription plan, which starts at $6.99/month for the cheapest one.

We want to know if this plan or any of the streamer’s other methods will work in the long run. But the streamer needs to be careful with its new rules, so it doesn’t lose even more subscribers. But there are so many great shows, like Stranger Things and Wednesday, that the movie could be a great idea.

Is Netflix ready for a clampdown?

Next year, Netflix will start charging customers more if they share their accounts with people outside their households, which is against the company’s rules.

But for now, Netflix users who continue to break the rules about sharing passwords won’t be punished harshly: Even if people share passwords, the company won’t close their account, and they probably won’t charge extra fees without their permission.

Netflix said in October that at the start of 2023, it will release “a smart way to make money from account sharing.” This will be done in places other than the first test markets in Latin America. People who share passwords will be more likely to make separate accounts (“Extra Members”) and pay for people who don’t live in their homes.

Netflix hasn’t said how much an Extra Member sub-account would cost in the U.S. or other new markets. But this fee has been between 23% and 29% of the Netflix Standard two-stream plan in Chile, Costa Rica, and Peru. So each sub-account in the United States could cost between $3.50 and $4.50.

In the three test markets, Netflix has told members who seem to be sharing their account with people outside of their household (based on data like I.P. addresses, device I.D.s, and account activity from devices signed into the Netflix account) about the new payment options. Netflix has also asked its users to confirm their account information by sending a verification code to the primary account holder.

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And if people don’t pay for password piggybackers, what happens? All signs point to the fact that the most aggressive thing Netflix plans to do in the first phase of the paid-sharing rollout is to keep sending emails and notifications to people who need to follow the rules.

“Netflix will not automatically charge you if you share your account with someone who doesn’t live with you,” the company says on its help page about sharing passwords. Even so, this is likely to stick around for a while.

Customers who have been sharing passwords for years with Netflix’s permission would be upset if Netflix automatically charged new fees for account sharing. It also gets the attention of government officials worried about unfair billing practices.

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Netflix’s plan to make money off people sharing passwords is to ask them if they want to do it. This shows that Netflix isn’t sure how much extra money it will make from the “crackdown.” Still, the company wants to find new ways to make money because the growth of its core subscribers has slowed (and shrank in the first half of 2022). So, in addition to making money from paid sharing, Netflix worked hard this year to launch a new, cheaper plan supported by ads in November. But this plan is getting off to a slow start.