Netflix confirmed in a shareholder letter late last week that the move to no longer allow users to share passwords for free could begin by the end of March.
In October, Netflix announced plans to change its Password Sharing Policy and said it would eventually start charging people for sharing accounts, but didn’t give a specific date for the start of the new policy at the time.
As of now, the company hasn’t given a date, but said in the letter that it would begin rolling out more widespread paid sharing “later in the first quarter.” [quarter one].”
“While our Terms of Service limit Netflix usage to one household, we recognize that this is a change for members who share their account more broadly. That’s why we’ve been working hard to develop additional new features that enhance the Netflix experience, including the ability for members to review which devices are using their account and transfer a profile to a new account,” the company said.
The letter detailed that account sharing, practiced in more than 100 million households, is “undermining” its ability to invest and improve.
The company, which described 2022 as a “tough” year, suffered its first subscriber loss in more than a decade at its client Base dropped by 200,000 subscribers in the first quarter of last year.
Despite those losses early last year, Netflix said it ended on a “brighter end,” praising its fourth-quarter revenue, operating profit and membership growth as it beat forecasts with content like Harry and Megan that has “exceeded” its expectations.
However, the company noted in the letter that the proposed crackdown on account sharing is likely to result in “an adverse impact on short-term exposure, as measured by third parties such as Nielsen’s The Gauge.”
To fuel growth, the company also rolled out a lower-priced ad-supported plan in November, saying the move has resulted in “incremental membership growth.”
“We believe we’ve found a clear path to re-accelerating our revenue growth: continuing to improve all aspects of Netflix, introducing paid portions and expanding our advertising offerings,” Netflix said.
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