Say Goodbye to Netflix Password Sharing and Say Hello to Ads

Say Goodbye to Netflix Password Sharing and Say Hello to Ads

Netflix looks set to implement some of the biggest changes to its business model in years. During the company’s first quarter 2022 earnings call, CEO Reed Hastings dropped two bombshells.

Netflix lost subscribers

First: Netflix lost subscribers for the first time in a decade – 200,000 to be precise. That’s a far cry from the 2,000,000 subscribers the company predicted. Gain just three months ago.

It’s worth noting that Netflix is ​​in the red on its subscriber numbers in part because of Russia’s invasion of Ukraine — it lost 700,000 accounts after shutting down its services in Russia. Yet even ignoring this part of the accounts, Netflix fell far short of expectations.

To continue combating declining growth, Netflix plans to crack down on password sharing, which Hastings has previously called a “positive thing” on several occasions.

On today’s call, Hastings instead said “we just gotta get paid for them”, referring to the roughly 100 million viewers who use the service for free. Netflix says its anti-password sharing system will take about a year to roll out globally.

The crackdown on password sharing is not a huge surprise. I imagine most Netflix users knew this was coming ultimatelybut Netflix was still growing fast enough that the company didn’t see password sharing as a major issue.

The company has actually been testing password-sharing deterrents for a few months now. That said, COO Greg Peters indicated that Netflix might not eliminate password sharing entirely, but rather charge people for it. That suggests the company might consider offering a split plan for people who might not live in the same household, though Peters didn’t specify as much.