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Netflix is set to start cracking down on password sharing in the US.
The streaming giant revealed its plans in a letter to shareholders released yesterday (April 19) along with its first quarter 2023 financial results.
In the letter, Netflix said password sharing would “undermine” it. [its] Ability to invest in and improve Netflix and build a business for paying members.
The company One hundred million Households around the world share accounts.
Netflix reports that it has added 1.75 million First Quarter Subscription to End Quarter 232.5 million Increased global paying subscribers 4.9% Yoi.
Netflix first announced its intention to start charging users an extra fee for sharing passwords about a year ago.
In March 2022, Netflix began testing crackdowns on these passwords. This is an initiative Netflix now calls “Paid Sharing”.
In February 2023, Netflix will expand its “Paid Sharing” trial to Canada, New Zealand, Portugal and Spain.
In these four markets, Netflix Members can “buy more members” by adding up to two additional member subaccounts that do not live together.
Each comes with a profile, personalized recommendations, login and password – for an additional fee Canadian Dollar $7.99 1 month per person in Canada New Zealand Dollar $7.99 in New Zealand, EUR €3.99 in Portugal and €5.99 in Spain.
Netflix says the planned rollout of “paid sharing” in the US will be part of a broader rollout in the second quarter of 2023.
Netflix told investors this week it was “satisfied with the results” of its rollout in Canada, New Zealand, Portugal and Spain to date. [‘Paid Sharing’] In Q1, we identified an opportunity to improve the member experience. “
Netflix added:We have staggered the timing of our broader release from late Q1 to implement these changes [2023] Go to Q2.
“While this means that some of our expected membership growth and revenue benefits will decline in Q3 instead of Q2, this will result in better results for both our members and our business. I think we can get it.”
Another streaming giant that may be keeping an eye on these developments is Spotify.
Audio streaming platforms began cracking down on their own account-sharing issues in 2019 when they began requiring members of their $15.99-per-month premium family subscriptions to prove they all live at the same address. bottom.
According to SPOT’s FAQ, to be eligible for a shared account, the primary account holder and up to five sub-account holders must be family members residing at the same address.
Spotify adds to these FAQs that “from time to time we may ask you to re-verify your home address to ensure you meet the eligibility criteria.”
Spotify, which had 205 million premium subscribers as of December 31, said in its financial results for the fourth quarter and fiscal year of 2022, “Family plans will increase the total number of premium subscriber additions in 2022. contributed greatly to the
In the face of rising inflation, slowing music subscription growth, and previous resistance to raising premium individual rates in its largest market, Spotify is turning to Netflix’s revenue as a case study for growing its own subscribers and revenue. Could we look to a “paid sharing” scheme?
(Spotify has increased the price of its family plan in multiple markets over the past year and a half, including the UK and US. MBW Analysis in June. But the classic price of $9.99/€9.99/£9.99 per month for individual premium Spotify subscriptions remains the same in Europe’s biggest markets such as the US, UK, and Germany. )
Looking to Netflix as a case study of how users react when they are charged to share their accounts, Netflix cited the results of its own recent testing and launch. , told investors that in Latin America, “we saw a cancellation response in each market.” We will be announcing the news,” he said, adding that it “will affect the growth of our members in the near future.”
However, Netflix said it is seeing “increase in acquisition and revenue” as these Latin American market account “borrowers” “start activating their own accounts and existing members add “additional member” accounts.” I added that I was given.
In Canada, which Netflix believes to be a “reliable predictor for the United States,” the streaming platform said its paid membership base was larger than before the launch of its paid-sharing initiative, and that “revenue growth accelerated and is now growing.” “There are.” Faster than America.”
Netflix also said to shareholders: , probably shrinks moderately.
“However, the pattern is similar to what we saw in Latin America, and we believe we will continue to improve our programming and see engagement growth resume over time as borrowers sign up for their accounts.”global music business
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