LOS GATOS, California -- Get ready to pay more if you share your Netflix password.
The streaming service giant, in a letter sent to shareholders, said it intends to “more broadly” roll out its crackdown on password sharing with people who live outside of subscriber households in the first quarter of 2023. It estimates more than 100 million households share accounts.
The company said it expects some users will cancel their accounts, but that others who are sharing will be able to transfer a profile to a new account.
Over time, it expects membership to grow.
“We believe the pattern will be similar to what we’ve seen in Latin America, with engagement growing over time as we continue to deliver a great slate of programming and borrowers sign up for their own accounts,” the company told shareholders.
The company did not say what it will charge for a password sharing fee, nor did it indicate how it will crack down on the practice. But Netflix can tell when people log in outside their household based on their IP address.
Netflix has been experimenting with ways to track password sharing for a few years, according to Nexstar Media Group.
In 2021 it tried a verification process that involved sending messages to subscribers when they logged in.
In 2022 it tested creation of sub-accounts for people in other households for a fee and a system that allowed them to transfer their profile information to other devices.
In the letter to shareholders, the California-based company described 2022 as a tough year “with a bumpy start but a brighter finish” and expressed optimism for 2023.
Revenue for the fourth quarter of 2022 exceeded forecasts, the company said. Netflix finished the year with 231 million paid memberships and generated $32 billion in revenue.
“We believe we have a clear path to reaccelerate our revenue growth: continuing to improve all aspects of Netflix, launching paid sharing and building our ads offering,” the company said. “As always, our north stars remain pleasing our members and building even greater profitability over time.”
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