If you borrow a Netflix account, don’t be surprised if you lose access in the coming weeks.
The streaming service signaled in a Thursday earnings report that it'll start cracking down on account sharing this quarter by rolling out its “paid sharing” options more broadly.
This means Netflix subscribers will need to pay more to continue sharing their accounts. Last year, the company tested the paid sharing plans in Latin America, where it charged subscribers an extra $2.99 per month to let someone outside their household stream Netflix.
The looming crackdown will no doubt annoy users. So Netflix anticipates some paid subscribers will end up canceling their accounts in response. The company saw this in Latin America when it began testing the paid sharing options.
“I think it's worth noting that this will not be a universally popular move. So, there will be current members that are unhappy with this move. We'll see a bit of a cancel reaction to that,” Netflix Chief Product Officer and COO Greg Peters said in an earnings call.
But over time, Netflix expects the crackdown to spur revenue growth either through users opting into the paid sharing plan or signing up for their own standalone accounts. In November, the streaming giant launched its first ad-supported tier, which costs $6.99 per month, a drop from the $9.99 per month basic plan.
“Part of what we're trying to do is make sure that we are being responsive to that in finding the right price points, whether in terms of an individual account or an extra member affordance,” Peters said.
Although the company plans on rolling out the paid sharing this quarter, Peters added: “We'll stagger that a bit, you know, as we sort of work through sets of countries. But we'll really see that happen over the next couple of quarters.”
How Netflix will exactly crackdown on account sharing remains unclear. But the company will likely examine the IP addresses and device models freeloaders are accessing Netflix from and block ones that don’t match the IP address and devices of the main account holder. As a result, paid subscribers should still be able to stream Netflix on their phone as they’re traveling, even though their IP addresses change.
“As is the case today, all members will be able to watch while traveling, whether on a TV or mobile device,” Netflix added in its earnings report.
Also on Thursday, Netflix announced that Reed Hastings will step down as co-CEO, with Peters and current co-CEO Ted Sarandos splitting that role going forward. Hastings will move over to serve as executive chairman—"a role that founders often take (Jeff Bezos, Bill Gates, etc.) after they pass the CEO baton to others," Hastings says.
"Our board has been discussing succession planning for many years (even founders need to evolve!)," Hastings wrote in a blog post. "As part of that process, we promoted Ted to co-CEO alongside me in July 2020, and Greg to Chief Operating Officer – and in the last 2.5 years I’ve increasingly delegated the management of Netflix to them."