Netflix’s long-anticipated effort to reclaim revenue it has lost due to password sharing has officially arrived in the U.S., with the company notifying subscribers about its new policy via email this week.
After long winking at the practice of passing along log-in credentials during its early anything-for-growth phase, the company has gotten serious about scrutinizing it in recent years. It launched what it prefers to call “paid sharing” earlier this year in Canada, New Zealand, Portugal and Spain after a trial last year in a handful of Latin American countries. Strategically, the move to limit free password sharing is tied to the launch last fall of a cheaper, ad-supported subscription tier. Both initiatives are expected to generate billions in new revenue over the next few years.
'Skull Island': Netflix Series Sets Voice Cast, Premiere Date; Releases Teaser Trailer
Bank of America analyst Jessica Reif Ehrlich last week wrote in a research note to clients that the “broader crackdown on password sharing will be an accelerant to Netflix’s ad-supported tier.” With one of two users reporting that they have shared a password, she added, “there is large upside.” Ehrlich has a “buy” rating on Netflix shares, which have risen about 16% in 2023 to date.
Netflix last week revealed it has 5 million monthly active users of its new ad-supported tier. While that’s a tiny fraction of the global total of 232.5 million subscribers, the tally is noteworthy given the ad-free service launched in a dozen territories barely six months ago.
In the notification email to subscribers, the company begins by stating that a Netflix account “is for you and the people you live with — your household.”
Subscribers to the two highest subscription tiers can buy additional users for $7.99 a month on an ad-free plan. The Standard tier, which costs $15.49, entitles subscribers to buy one additional user, while the $19.99 Premium tier comes with two additional subscriber add-ons. The $6.99 ad-supported plan does not come with the option to add paying subscribers.
“You can easily watch Netflix on the go and when you travel,” the email emphasizes. The company routinely tracks account usage to see where people are regularly logging in to watch. Subscribers can also proactively view who is accessing their account, with the company going so far as to recommend that they “sign out of devices that shouldn’t have access and consider changing your password.” (Harsh, bruh!)
Co-CEO Ted Sarandos said at a Wall Street conference last December that the initial response to paid password sharing shows that it’s similar to “the way you manage a price increase” in terms of communication. “Consumers aren’t going to love it right out of the gate,” he conceded, “but we need to show them why they should see value.”
Here is the full email being sent to Netflix subscribers:
Must Read Stories
Wes Anderson’s ‘Asteroid City’ Review & Red Carpet Photo Gallery
Netflix Takes North America On Todd Haynes’ Buzzy Cannes Pic ‘May December’ In $11M Deal
HBO Series Takes Over Croisette: Review, Red Carpet, Breaking Baz, Premiere & More
Bill Comes Due As Streaming Giant Begins Clampdown On Password Sharing In U.S.
Read More About:
Source: Read Full Article
Delta Air Lines' $200 per month experiment for changing unvaccinated employees' minds seems to be working
Innovative Solutions Recalls Chicken Patty Products
European Stocks Seen Opening Firm
Renewable electricity generation is growing — but it's not enough to meet rising demand, IEA says
U.S. and China can co-exist peacefully, says White House's Kurt Campbell