Netflix, an OTT streaming platform, is planning to charge users for sharing their credentials. According to the site, the streaming behemoth has suffered massive income losses and a significant drop in subscription count.
Netflix has stated that one of the reasons for its poor growth is password sharing. Now, the streaming service said during its quarterly results call on Tuesday that subscribers who share their login ID and password will be charged additional costs beginning in 2023.
Netflix mentioned in its earnings report about cracking down on account sharing,“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 specified how much customers would be charged for revealing their passwords; however, the amount is believed to be between $3 and $4. Interestingly, Netflix subscribers who do not want to pay any more costs can use the streaming service’s new migration tool to assist them migrate their profiles.
Netflix had been experiencing financial difficulties as a result of revenue losses. In its quarterly report, the OTT stated, “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,” stated Netflix.