Netflix to “Broadly” Introduce its Password-Sharing Policy Amid Declining Revenue

The days of swapping Netflix passwords will soon be over. Netflix stated in its earnings report today that it intends to impose password-sharing policies “more broadly” by the end of the first quarter of 2023

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.

As we roll out paid sharing, members in many countries will also have the option to pay extra if they want to share Netflix with people they don’t live with.


Additionally, the firm revealed that CEO Reed Hastings will step down after 25 years in charge and will be succeeded as co-CEO by Ted Sarandos and Greg Peters, who was previously COO of Netflix. Hastings will serve as executive chair rather than entirely departing the business.

When it introduces password sharing, Netflix says it anticipates a “cancel reaction” in every country, but that in the long run, customers will pay for more accounts, which will lead to “improved overall revenue.” It doesn’t specify a price or an exact date, but the phrase “later in Q1’23” suggests that it would take effect in April

The signs had been there for some months. The world’s largest streaming service encouraged customers to register their own accounts by introducing the simple profile transfer feature in October if they are currently sharing one with a friend or family member. In addition, Netflix released a new feature that enables you to remotely control the devices connected to your account and shut out undesired friends or family members. 

In Chile, Costa Rica, and Peru, Netflix has started asking users to pay for an additional sub-account if the streaming service determines that someone using the account lives outside the user’s residence. Netflix has already been testing various methods to combat password sharing in South America. Separately, the service began enabling customers in Argentina, El Salvador, Guatemala, Honduras, and the Dominican Republic to purchase extra “homes” for anyone residing apart from the subscriber’s main family.

Our job is to give them a little bit of a nudge and to create features that make transitioning to their own accounts easy and simple.” 

-Greg Peters 

Netflix is adopting a variety of strategies to appease investors as subscriber growth remains sluggish, including a crackdown on password sharing. In the fourth quarter of 2022, Netflix reported adding almost 7.6 million new subscribers worldwide. Though it still reflects a little decline from the 8.2 million customers it attracted around the same time last year, the result beats analyst estimates. 

Netflix continues to face intense competition from rival streamers even as its member counts stagnate and it tries to make money from those it already has. Last year, Disney Plus introduced an ad-supported tier and has since continued to entice members with a package deal that includes Hulu and ESPN Plus. The Last of Us premiere on HBO Max was closely followed by the record-breaking House of the Dragon premiere, which attracted a total of 4.7 million people in a single night.

As Netflix continues to keep content spending to a maximum of $17 billion, it is beginning to appear that 2023 might be a less exciting year for the streaming service. This cutback is evident in the sparse movie lineup for this year.


Muhammad Zuhair

Passionate about technology and gaming content, Zuhair focuses on analysing information and then presenting it to the audience.
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