Friday, May 20, 2022

Netflix is cracking down on unpaid users by charging more for password sharing and introducing ads

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Your next Netflix and Chill session may not be as chill, get ready to face interruptions with advertisements as the leading media streaming platform is now taking active steps to increase revenue. This comes in light of the company’s stock taking a nosedive in its earnings. Netflix wasted no time in revealing that it will be introducing ad-supported plans and will take active steps to curb password sharing in order to increase its viewership and widen its userbase.

While the new plan is expected to be rolled out over the next year or two, it seems that the company is looking to offer it sooner than later. In an internal memo, the company claims that the ad-supported plan will be released later this year.

Netflix has been forced to take extreme steps in order to keep investors happy.

Netflix is likely to introduce ads by the end of 2022:

As per a report from The New York Times, Netflix executives have stated in an internal memo that the cheaper ad-supported plans will roll out in Q4 of 2022. During the same timeline, the media giant will also levy extra charges for their subscribers who share passwords of their Netflix accounts with other people who do not reside at the same location.


The memo went on to state that every major streaming platform apart from Apple TV+ offers similar plans with advertisements such as Hulu, HBO Max, Peacock, and others. The company has revealed that over 222 million households are paid and registered subscribers of Netflix but at the same time, there are 100 million households who are using the streaming services of the company with someone else’s account.

Binge-watching your favorite Netflix Series could get expensive soon

Greg Peter, CFO of Netflix, has claimed that the company is not trying to completely ban password sharing, however, it will be asking users to pay more in order to be able to do that. The company is already testing the concept of this extra fee for account sharing in Peru, Chile, and Costa Rica.

These developments come after the streaming platform recorded a loss of 200,000 members. The shutting of businesses in Russia had an impact on this as well, the company is on track to record a loss of another two million users this quarter.

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Despite these steps, it is hard to believe that they could have any impact on Netflix’s revenue. People tend to always find some way around to access the platform, in addition to this, the platform risks losing more subscribers if the pricing is not competitive and aggressive. It will not be surprising to see their user base dip post the password change rule comes into force.

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