Netflix confirmed in its quarterly investor earnings letter on Thursday that it will be cracking down on account sharing “more broadly” in the coming months.
The crackdown would limit a Netflix account to users within one household, rather than shared with multiple users outside of a household.
Account holders who want to share with users outside the home can pay an extra fee (price yet to be announced) to keep those profiles. All members will reportedly still be able to use their account whilst travelling and to view shows on both TVs and mobile devices.
These changes had already been put in place in several Central American and South American countries, which have been used as test markets.
Netflix has long hinted that it would expand its crackdown on account sharing to other countries and began such a move with the rollout of a profile transfer feature in October, allowing users to move their viewer profiles to new accounts.
In its letter, they say: “Today’s widespread account sharing (100M+ households) undermines our long-term ability to invest in and improve Netflix, as well as build our business. While our terms of use limit use of Netflix to a household, we recognize this is a change for members who share their account more broadly.”
Netflix has 230 million-plus global subscribers and says it expects to start making the expansion at the end of the first quarter in late March, with the rollout staggered across countries throughout this year.
Having seen how it went in test markets, they warn it will likely lead to some subscriber cancellations in the short term and won’t be a “universally popular move” even as overall revenue is expected to improve.
Combined with its newly launched advertising tier, which is reportedly going successfully, the crackdown is expected to bring more revenue to the company as Wall Street shifts from a focus on subscriber growth to one on profits in regards to streaming services.
Source: THR
