After a rough year, Netflix is finally bringing back lost customers and satisfying its shareholders. Yeah, we’ll see how long that lasts! Netflix now confirms that it will crack down on password sharing early next year—an extremely unpopular decision that could drive customers away.
The news came during Netflix’s quarterly earnings call on October 18th, where the streaming giant toyed with the idea of cloud gaming and boasted an uptick in subscribers (following a huge loss earlier this year).
Netflix began testing an anti-password-sharing system in March of 2022. The experiment, which is currently limited to Chile, Costa Rica, and Peru, relies on a warning system. Customers caught sharing their password are asked to remove guests from their account or pay a small monthly fee (about $2). Obviously, people affected by this experiment are confused and upset.
“Finally, we’ve landed on a thoughtful approach to monetize account sharing and we’ll begin rolling this out more broadly starting in early 2023. After listening to consumer feedback, we are going to offer the ability for borrowers to transfer their Netflix profile into their own account, and for sharers to manage their devices more easily and to create sub-accounts (“extra member”), if they want to pay for family or friends.”
We aren’t sure how Netflix will roll out its anti-password-sharing policy. The company could push this nonsense globally, or simply add a few countries to the experiment.
Interestingly, Netflix suggests that its upcoming ad-supported plan will keep customers happy amidst the password-sharing crackdown. We expect that the opposite will be true—forcing customers toward an ad-supported plan will only add insult to injury. It doesn’t help that the ad-supported plan has some ridiculous limitations.
Earlier this year, we asked ourselves if Netflix is still worth using. The platform’s excessive price hikes and careless attitude toward original content continually rubs viewers the wrong way. Putting an end to account sharing (and pushing customers toward an ad-supported plan) will not make customers happy.
We expect rival streaming services to follow in Netflix’s footsteps. Ad-supported streaming will soon become the norm, and password sharing is on its way out. The fact that Adobe and other companies see “password piracy” as a business opportunity is an unfortunate sign of what’s to come.