Netflix delays crackdown on password sharing in the US
Netflix has confirmed that its paid password sharing will be introduced in the US. Over the past few years, the company has claimed that it has been incurring losses because of password sharing among its users.
It began cracking down on the practice last year, when it introduced a paid sharing option called Netflix Homes in a few Latin American countries. This was followed by Profile transfer, which allowed migrating a shared profile to a new account. The streaming media mogul also introduced an option to remove devices from accounts remotely.
The company announced its first ad-supported plans a few months ago, to attract more users by offering its library at a cheaper price tag than its regular plan. Analysts had expected the move to backfire, but the ad-supported tier turned out to be profitable, amassing over 1 million users in the US. It's worth noting that these were new subscribers, and not people who were downgrading from the regular plan. Netflix is bringing some improvements to the Basic with Ads plan that would make it better than the ad-free plan.
The Los Gatos company expanded its paid sharing password sharing to users in New Zealand, Canada, Portugal, and Spain in February 2023. It allows users to include an extra member to use their account, for an additional fee. It costs $7.99 in Canada and New Zealand, €3.99 in Portugal, and €5.99 in Spain. The prices for the add-on drew criticism from users, as it is higher than the Basic with Ads plan in some regions.
Netflix paid password sharing to roll out in US in June
A support page that was spotted a few months ago on Netflix's website had indicated how it would crack down on password sharing in the US, by introducing its "buy an extra member" option. However, Netflix was quick to decline the news, and had said that the rules only applied in the regions that Netflix Homes was available in. Netflix has published an earnings report for Q1 2023, you can download the PDF here. The report says that the service added over 1.75 million new subscribers in the first quarter. It also mentions that the paid sharing service has been successful in the 4 countries (mentioned above).
The company explained that while it could have rolled out the paid sharing broadly in the 1st quarter of the year, it chose to delay the expansion to improve the user experience. The anti password sharing system deployed by the service detects the primary location of users by checking the IP address, device, user activity, to create a trusted device. When you try to stream videos from other locations, it may prevent you from accessing the service. Netflix wants to ensure users can access the service while they are travelling, The Verge notes that this is one of the reasons why the paid password sharing hasn't rolled out in the US. The company plans to introduce it by late Q2, around June.
Netflix to shutter its DVD business
Netflix also announced that it is shutting down its DVD business, DVD.com, which it acquired in 2012. A chart on its website says the service shipped its first disc Beetlejuice in 1998, and has sold over 5.2 Billion DVDs over its 25 years of existence. It will close on September 29th, 2023.
After a decade, or so, of enjoying the growth experienced that password sharing aided, I expect many people to cancel or suspend Netflix when the new “rules” go into effect. Netflix programming is no longer as valuable as it used to be.
Not in Australia though.
We have good consumer protection here and Netflix have no chance at pulling this stunt unless they change their per device wording to something like per IP address or per household and those two are a little bit broad anyway.