Netflix, an OTT streaming platform, is all set to charge users for sharing their passwords. The streaming giant has suffered huge losses in terms of revenue and witnessed a major slump in its subscription count, according to the platform.
Netflix has mentioned that sharing passwords is one of the causes behind its slow growth. Now the streaming service announced during the quarterly earnings call on Tuesday that it would charge users additional fees from users who share their login ID and password with effect from 2023.
Citing about cracking down on account sharing, Netflix stated in its earnings report, “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 5, excluding China and Russia, where we don’t operate. 6 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. In countries with our lower-priced ad-supported plan, we expect the profile transfer option for borrowers to be especially popular.”
However, the OTT platform has not revealed how much the users will be charged for sharing their passwords, reportedly it is expected that the price will be somewhere between $3 to $4. Interestingly, Netflix users who do not wish to pay any extra fees can use the streaming platform’s new migration tool which will help them with transferring their profiles.
Netflix had been going through some turmoil due to losses in revenue. Speaking of the revenue and competition strategy, the OTT mentioned in its quarterly report, “As it’s become clear that streaming is the future of entertainment, our competitors – including media companies and tech players – are investing billions of dollars to scale their new services.”
“But it’s hard to build a large and profitable streaming business – our best estimate is that all of these competitors are losing money on streaming, with aggregate annual direct operating losses this year alone that could be well in excess of $10 billion, compared with our +$5-$6 billion of annual operating profit. For incumbent entertainment companies, this high level of investment is understandable given the accelerating decline of linear TV, which currently generates the bulk of their profit,” says Netflix.
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