To combat the practice of password sharing, Netflix will phase out the arrangement beginning in early 2023. According to The Wall Street Journal (WSJ), the company will charge people who share accounts for it.

According to the report, over 100 million Netflix subscribers use the service without paying for it. It has 223 million subscribers and a market capitalization of $128 billion. According to Cowen Inc, the step could generate an additional $721 million in revenue in 2023 from the US and Canada alone.

According to the report, the business had planned to cease the practice in 2019, but the Covid shutdown resulted in an increase in subscribers, which more than offset the revenue loss. However, since 2021, the number of subscribers has been steadily declining.

With the crackdown, the corporation runs the danger of alienating customers and losing goodwill.

Ted Sarandos, the co-CEO of Netflix, told investors in the beginning of December that “make no mistake, I don’t think customers are going to adore it right out of the gate,” according to WSJ.

The business also introduced a $6.99 per month ad-supported membership bundle in November to prevent hard landings. According to subscription analytics company Antenna, in November, it was the least well-liked tier of its service.

The business is doing testing about password sharing in Latin America. A one-time password (OTP) is provided to the account holder’s mobile device rather than preventing password borrowers from accessing that person’s account. Within fifteen minutes, the spectator must enter. Although sharing is possible, the owner will eventually have to pay an extra monthly cost. It is responding positively.

However, in light of declining sales, the business is now keen to stop the practice. Soon, there will be a crackdown.


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