Streaming giant Netflix has announced that it will be rolling out its paid password sharing feature “more broadly” during the first quarter of this year. The company has stated in its earnings reports that while its terms of use currently limit use of Netflix to a household, they recognize that this change will affect members who share their account more widely. As they roll out paid sharing, members in many countries will also have the option to pay extra if they want to share Netflix with people they don’t live with.
The company expects that there will be some “cancel reaction in each market” but it will eventually lead to “improved overall revenue.” This move comes after Netflix CEO Reed Hastings announced last month that the company was planning to put an end to its password sharing feature in early 2023, due to the negative impact it has on their earnings. However, the rise in subscriptions in 2020 led Netflix to avoid addressing the issue. But with the revenue downfall last year and the platform’s first subscriber loss in 10 years, Hastings decided that it was time to take action on the issue.
In October 2020, Netflix had announced the ‘Profile Transfer’ feature to prevent password sharing, which was rolled out to all members globally. But now, with the introduction of paid password sharing, the company hopes to combat the problem of password sharing and improve its overall revenue. Alongside this, the company also announced that Reed Hastings has stepped down as Netflix’s co-CEO and will now serve as an executive chairman, and Greg Peters has stepped up from COO to become Ted Sarandos’s co-CEO.
