Netflix said a crackdown on password sharing among US subscribers would occur between April and June, slightly delaying a plan that has caused consternation among many streaming service subscribers.
In its quarterly revenue report, Netflix said it was “satisfied with the results” of a paid password-sharing system launched in four countries and would introduce it in the United States in the second quarter. The company previously said it plans to introduce it by the end of March.
News that Netflix would not allow users to share their passwords widely shocked his fan base. The strategy shows a 180-degree shift for the streaming company, which once encouraged password sharing as a way to attract more viewers.
Now, as it faces competition for streaming viewers from Disney+, Hulu, Peacock and Paramount+, Netflix is looking to make more money from its existing subscribers.
The company expects backlash once it forces shareholders to pay.
“It’s not going to be a universally popular decision, so there will be current members who will be unhappy,” co-CEO Greg Peters previously told investors.
This has happened every time Netflix has rolled out “paid sharing” in a country, the company said, citing “cancellation backlash” to the program in Canada, New Zealand, Spain and in Portugal, when Netflix started requiring password sharers to pay more.
“As a reminder, as we roll out paid sharing — and some borrowers stop watching either because they don’t convert to additional members or full paid accounts — short-term engagement, as measured by third parties like Nielsen, will likely decrease slightly,” the company wrote.
Over time, however, he believes this strategy will increase his membership.
Netflix estimates that 100 households around the world share passwords with other people.
The company “clearly wants to manage the fallout from the new [password sharing] strategic,” Third Bridge analyst Jamie Lumley said in a note. “Whether the launch will be delayed further is a big question as we head into the next few months.”