Netflix set to eliminate password-sharing for good

It is the time we have all been dreading. Netflix is cracking down on password-sharing sometime between April and June. The streaming giant plants to stop people in the same household from sharing account details in the US and other countries. This plan has caused some worry among users of the streaming service.

Netflix launched paid sharing in four countries – Zew Zealand, Portugal, Spain and Canada – earlier this year, reports Mashable. It said it was “pleased with the results” and planned a broad rollout for this upcoming financial quarter. This was included in its Q1 earning report.

Some backlash on the cards

Netflix announced its crackdown last year after witnessing a decline in subscriber numbers. This also came amid an increase in competitors like Hulu, Disney+ and Paramount+ and Amazon Prime. Netflix now hopes to make more money from its existing users.

The streaming services says it expects some backlash once the plan is implemented and sharers will need to pay up says CBS News:

As a reminder, as we roll out paid sharing — and as some borrowers stop watching either because they don’t convert to extra members or full paying accounts — near term engagement, as measured by third parties like Nielsen, will likely shrink modestly

Netflix expects membership to grow despite crackdown

Netflix believes that, over time, this plan will actually grow its membership. Its password-sharing crackdown comes after the company shut down its DVD rental services that launched 25 years ago.

The streaming company now offers pricing tiers for HD and ad-supporting options for example. Netflix claim these are gaining favourable traction:

Engagement on our ads tier is above our initial expectations and, as expected, we’ve seen very little switching from our standard and premium plans

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The company, according to Forbes, says it is also about to upgrade the feature set of its ads plan to include 1080p versus 720p video quality in 12 ads markets. Starting with Spain and Canada.

The company says its crackdown on password-sharing will benefit profits in the long run. It describes the delay from the first to second quarter:

While this means that some of the expected membership growth and revenue benefit will fall in Q3 rather than Q2, we believe this will result in a better outcome from both our members and our business

Netflix estimates that over 100 million households, worldwide, share passwords with other people.