Netflix Login Update: Crackdown on Password Sharing Starts Before Year Ends

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The days of Netflix password sharing will soon be over.

Netflix has confirmed through an internal notice to employees what many have been dreading. The company plans to crack down on password sharing before the end of 2022 as reported in The New York Times. The move will also include the initiative for an ad-supported platform. These new strategies are meant to address major problems the company is facing, including customer churn and slowed down business growth, the company explained.

Less than a month ago, details of the streaming giant’s tumbling stock value and 200,000 subscriber loss peppered the sections of business and tech news. Password sharing was cited as one of the reasons among many others. At that time, we reported on how this particular Nextflix dilemma underscores every SaaS company’s nightmare as a subscription-based business and cited several risks to password sharing.

As a temporary solution, Netflix came up with the idea of a paid sharing feature. This was already tested back in March among their subscribers in Chile, Costa Rica, and Peru. Basically, to be able to continue sharing their accounts with people outside their households, customers would have to shoulder a surcharge. Parents, for example, who have children away for college or not living with them would then need to pay more or split the bill.

Customers and media did not expect an accelerated effort to stop households and families from sharing their account logins, especially since co-CEO Reed Hastings gave some assurance on the matter. During the company’s first-quarter earnings interview, Hastings said, “We test many things but we would never roll something out that feels like turning the screws” on consumers. It’s got to feel like it makes sense to consumers, that they understand it.”

Ads In Exchange for Lower-Priced Plans

Moreover, Hastings also stated that ads on the streaming platform were something they will think about in the “next year or two.” So, plans to roll out ads by this year also was another shocker. To give his take on the benefits of ads, Hastings did emphasize that ads provide options to consumers. In exchange for tolerating ads, customers can choose lower-priced subscription plans.

The paid ad model could definitely be an attractive offer, considering that Netflix is already as expensive as it is compared to its competitors like Apple TV+, Disney+, and Peacock, which are all priced below $10 per month. Currently, the Netflix premium plan has increased from $17.99 to $19.99 per month.

Meanwhile, the standard plan increased from $13.99 to $15.49, and the basic plan increased from $8.99 to $9.99. Among the three plans, the premium plan is the only one with 4K streaming. So, if you’re the type that really wants to get the best visual experience when binge-watching your favorite series or movies, then you are left with only the $20 subscription.

Though many employees and pundits already knew that the company needs to succumb to paid ads to continue growing, no one was really prepared for a back-to-back punch that would have a tremendous impact on the way customers enjoy and use the streaming service.