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Netflix establishes a deadline for its crackdown on sharing passwords

The start date of Netflix’s crackdown on password sharing has been revealed.

As part of its quarterly financial report for Q4 2022, Netflix said that it would begin rolling out its paid sharing function “more extensively” in Q1 2023. How to put it plainly? By March of 2023, after Q1 2023 concludes, Netflix will begin enforcing stricter rules on password sharing inside households.

According to reports, Netflix planned to roll out the feature before the year’s end. Although it obviously missed that deadline, it is still moving through with its intentions to prevent members of your immediate family and circle of friends from accessing your account. If you’ve been careless with your password and account information, they could be able to access your account.

If password sharing is so bad, why is Netflix now cracking down on it? The streaming service basically says that it makes them seem bad in comparison to other services. Netflix said that when millions of users share passwords, it “undermines our long term capacity to invest in and develop” the service.

To no one’s surprise, Netflix doesn’t think their password tightening initiative will go over well. The plan was tested in several areas of Latin America and South America last year, but it was met with resistance from subscribers. To make things worse, Netflix’s efforts to get people to sign up for the “add an additional member” function backfired. An additional layer of complexity was introduced by the feature that, for a nominal cost, lets consumers add several households (and all of its residents) to their accounts.

None of these problems, however, have prompted Netflix to reevaluate their strategy. Despite pushback from certain customers, the business plans to expand the availability of its paid sharing function in 2023. By enabling users to move their Netflix profiles to other accounts and fulfilling their desire to view Netflix material on multiple devices, Netflix seeks to appease its dissatisfied customer base.

Clearly, these are shifting times

New co-CEO Greg Peters acknowledged that Netflix’s restriction on password sharing “will not be a universally popular decision” as the firm released its Q4 2022 and annual financial numbers. Netflix anticipates this will result in a temporary loss of subscribers.

The executives of the streaming service, however, are certain that those users will return if a highly anticipated new series or film is made available. In Q4 2022, Netflix added 7.66 million subscribers thanks to blockbuster seasons of Stranger Things, Wednesday, and Glass Onion: A Knives Out Mystery, so the company’s officials are certainly optimistic that churned people will return.

Netflix’s strategy to prevent password sharing is meant to attract new customers. Anyone who wants to continue watching Netflix’s extensive library after a “account borrower” (as Netflix calls them) has their subscription terminated will have to sign up for a subscription of their own. Although this strategy has merit, it is not without its flaws, since it may encourage some viewers to resort to illegally downloading Netflix content.

However, it is unclear whether or if Netflix’s frequent warnings about a planned crackdown have convinced “account borrowers” to purchase their own membership, since the Q4 2022 report did not break out how many of its 7.66 million new subscribers were returning customers. While we doubt that will happen anytime soon, it would be fascinating to observe whether Netflix differentiates between new and returning subscribers in their subscriber statistics.

A new policy prohibiting users from exchanging passwords isn’t the only adjustment Netflix has planned. Netflix’s co-founder and current CEO, Reed Hastings, announced his departure during the company’s most recent earnings call. Hastings will keep his position as executive chairman while Ted Sarandos and Reed Peters take over as co-CEOs to steer the streaming powerhouse into the future.