Netflix aims to reduce password sharing starting in 2023. The streamer asserts that after enabling users to transfer their profiles to new accounts, it will start allowing consumers to create sub-accounts as early as next year in order to “monetize account sharing” more broadly.
Additionally, this data is included in today’s earnings announcement from Netflix. The company, which is getting ready to unveil its ad-supported tier next month and cut down on password sharing, reportedly acquired 2.4 million subscribers this quarter. According to the streaming service, it has gained 104,000 paid subscribers in the US and Canada during the last three months, up from 73,000 at this time last year. Additionally, it asserts that it is still dedicated to the “bingeable release model.”
Additionally, Netflix disclosed earlier this year that it was experiencing its first customer loss in more than ten years. The company’s subscriber base decreased by 1 million internationally and by 1.3 million in the US and Canada over the past quarter. In order to address this problem, Netflix has also been steadily deterring users from sharing passwords. Additionally, the company tested whether customers in Chile, Costa Rica and Peru would be willing to pay more for a sub-account if Netflix discovered that the owner’s membership was being used outside of their residence.
Additionally, in Argentina, El Salvador, Guatemala, Honduras, and the Dominican Republic, Netflix tested a feature that let users buy extra “homes” for accounts unaffiliated with their principal location. Additionally, the business has recently made its Profile Transfer function broadly accessible after testing it in a number of countries. With this option, customers can easily transfer their customized recommendations, viewing history, My List, saved games, and other settings to a new account. However, consumers in Latin America who were the subject of the testing, according to a report from Rest of World published last month, expressed annoyance.
Additionally, the streaming juggernaut stated last week that on November 3rd, it will introduce its $6.99/month Basic tier in the UK, Australia, France, Germany, Italy, Japan, Korea, Mexico, and the United States. As a result, viewers will see Netflix and Microsoft advertising, which the businesses claim would last between 15 and 30 seconds. Customers are unable to use this new tier to view the whole Netflix library due to licensing restrictions. Basic consumers cannot download anything for their devices and can only view material in HD. It is noteworthy that the company’s tier is accessible before Disney Plus, which is slated to debut on December 8.
Finally, despite the fact that rivals like Disney, Warner Bros., Discovery, Paramount, and NBC continue to grow their content libraries and subscriber bases, Netflix is still confident that its business model will outperform that of its rivals.
“It’s hard to build a big and profitable streaming business,” the company said. “Our best estimate is that all of these competitors are losing money on streaming, with aggregate annual direct operating losses this year alone that may be well in excess of $10 billion, compared with our +$5-$6 billion of annual operating profit.”