Netflix is rolling out a plan to halt password sharing by the spring.
In a letter to shareholders, the streaming giant says it is implementing password-sharing changes as it puts more emphasis on revenue and profit growth.
Recommended Videos
Instead, Netflix will introduce paid sharing so users can pay extra if they want to share access to their accounts. Netflix said it has already tested paid sharing in Latin American countries.
Netflix expects to roll out paid sharing “more broadly” later this financial quarter, which ends on March 31.
“Today’s widespread account sharing (100M+ households) undermines our long term ability to invest in and improve Netflix, as well as build our business,” the letter states. “While our terms of use limit use of Netflix to a household, we recognize this is a change for members who share their account more broadly. So we’ve worked hard to build additional new features that improve the Netflix experience, including the ability for members to review which devices are using their account and to transfer a profile to a new account.”
“As we 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. As is the case today, all members will be able to watch while traveling, whether on a TV or mobile device.”
The letter added that it saw a drop in subscribers in Latin America when it rolled out the paid sharing plans. There, it cost $2-$3 to add an extra member account for someone outside the account holder’s household.
“From our experience in Latin America, we expect some cancel reaction in each market when we roll out paid sharing, which impacts near term member growth,” the letter states. “But as borrower households begin to activate their own standalone accounts and extra member accounts are added, we expect to see improved overall revenue, which is our goal with all plan and pricing changes.”
Netflix announced last year that it was cracking down on millions of people who use passwords shared by family or friends.
Netflix has nearly 231 million worldwide subscribers – more than any rival in the streaming industry, like Amazon, Hulu, Google’s YouTube, Walt Disney Co. and Apple, according to the Associated Press.
Read also: