Netflix will crack down on password sharing this summer

Netflix’s long-awaited crackdown on password sharing is coming to the United States soon, the streamer announced on Tuesday.

Netflix originally planned to roll out “paid sharing” in the US in the first quarter of 2023. However, Netflix now says it will start rolling out the change – an update designed to convert account sharers into users. paying – a little later, no later than June 30.

This decision is not limited to the United States either. “We expect a large rollout, including in the US, in Q2,” the streamer said in its first quarter 2023 results report. Along with the announcement, Netflix also bid farewell to its 25-year-old mail-order DVD business. RIP.

Netflix’s quest to boost revenue by limiting password sharing has begun earlier this year in Canada, New Zealand, Portugal and Spain. In these countries, Netflix requires paid users to set a “primary location” for their account. In the future, if someone they don’t live with uses their account, Netflix alerts them to “buy an additional member”. Netflix says it will allow up to two additional members per account, and its fees per additional user vary by country. For example, it is an additional CAD $7.99 in Canada and €3.99 in Portugal.

Speaking of revenue, Netflix fell short of analysts’ expectations for its first quarter of the year. The company said it brought in $8.16 billion in the first quarter of 2023, while Wall Street expected a slightly higher figure – $8.18 billion. However, the company reported higher-than-expected earnings of $2.88 per share in the first quarter; analysts had expected $2.86 per share.

Earlier in 2023, Netflix neatly summed up its paid sharing update as a chance to clear up “confusion over when and how you can share Netflix,” but make no mistake, this is a crackdown. . On Tuesday, Netflix played a similar tune, telling investors that the change “will result in a better outcome for our members and our business.”

“We are seeing a cancellation reaction in every market when we break the news, which is impacting member growth in the short term,” Netflix said. “But as borrowers start activating their own accounts and existing members add ‘additional member’ accounts, we’re seeing an increase in acquisitions and revenue.”

Netflix ended regular trading with its stock price at $333.70 per share. After hours, the company’s individual stock price slipped below $307, before bouncing back to around $330 (as of 2:58 p.m. PT).

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