When will Netflix start restricting account sharing, for which they expect an initial loss of users

Netflix ended 2022 much better than it started. The company recently announced an increase of 7.66 million subscribers in the last quarter of last year, a much higher figure than expected. 2023 looks more uncertain. The streaming platform did not want to publish the expectation of new users for the first months of the year, but is already preparing to implement the measure that many customers have been fearing for months: to share accounts with people who don’t live in the same house. Or at least to take advantage of it.

The company said that more than 100 million users share their Netflix password with people they don’t live with and that this “undermines their long-term ability to invest in and improve Netflix”. “Although our terms and conditions limit the use of Netflix to just one household, we recognize that this is a change for members who share their account more broadly” commented in the results report. When will you start taking action against shared accounts? The company said only that “throughout the first quarter of 2023”which probably translates as March or April. They did not provide further details on which countries will be affected first or what system they will end up using to limit them, other than saying that “As we roll out paid sharing, members in many countries will also have the option to pay extra if they want to share Netflix with people they don’t live with.”.

Last year they tested several attempts to monetize shared accounts in certain territories. One was to offer to pay an extra monthly subscription for each person who connects outside the primary residence, which would have been cheaper than paying a full subscription, and in other countries it has done something similar, but the extra would have been paid for each extra house and not per username. The tests were not entirely satisfactory, with users never receiving notice of the change in conditions or being able to continue sharing their account without paying the extra.

As the time comes to act, Netflix continues to promote its new tools to make the transition from a shared account to a new account easier, for those who decide to save themselves the trouble. Two of them are a panel in which to control which devices are connected to the account and to be able to close sessions on them if we are the account owner. Another is the ability to transfer a user from a shared account to a new one, keeping lists, viewing history, and personalized recommendations.

From Netflix they hope that this measure assumes first of all a “delete reaction” by users, as Netflix’s new CEO Greg Peters described to Variety: “It will not be a universally popular movement” he admits. This is most likely why they haven’t announced their next subscription goal, because they expect current data to suffer.

Bet more on ads

Another of the measures that caused the most sensation last year was the launch of a cheaper subscription but with advertising and many restrictions (reduced catalogue, quality no higher than 720p…). The first data weren’t very encouraging, but Netflix is ​​convinced that it will continue to grow to become one of the preferred options for new users: “Overall, the reaction to the launch from both consumers and advertisers has confirmed our belief that our ad-supported plan has strong economic momentum (at least in line with or better than our ad-free plan) and will generate revenue and profits which will increase, although the impact in 2023 will be modest as it will grow slowly over time”. Spencer Neumann, CFO, says: “We wouldn’t get into a business like this unless we believed it could be bigger than at least 10% of our income and hopefully much more over time.”. We’ll see how this proposal evolves and what weight it will have in Netflix’s plans for the coming months.