A recent Forbes report states that Netflix plans to introduce a paid option for password sharing with people outside of one's household in Q1 of this year. The company had previously expressed concern over password sharing, but they now have a definite plan to implement the change, with the feature expected to be available by March.
In a shareholder letter, Netflix officially announced plans to offer a paid option for customers to share their passwords with individuals outside their household. The letter did not mention the cost or give a specific launch date, only stating it will be available in Q1 of this year. However, according to Forbes, the option is already available in some countries for $3 a month, which is a more affordable option than purchasing multiple Netflix accounts.
In the letter, Netflix acknowledged that the introduction of a paid option for password sharing may result in some customers cancelling their subscriptions. However, the company expects to see an increase in revenue and profit from this change. The letter stated, "We anticipate some subscription cancelations in each market when we roll out paid sharing, which will affect short-term subscriber growth. But as borrower households start to create their own standalone accounts, and additional subscriber accounts are added, we anticipate seeing improved overall revenue, which is the ultimate objective of all plan and pricing changes."
Whether you’re sharing a Netflix password with someone or borrowing theirs, be prepared to start paying for it. https://t.co/N0Vl0vdY5c
— KTLA (@KTLA) January 23, 2023
In the letter, Netflix also emphasized that it has experienced revenue growth annually since the outbreak of the pandemic, maintaining an operating margin of approximately 20%. The company aims to maintain this growth in revenue in the future. This positive financial outlook is in contrast to many other technology companies that have undergone significant layoffs due to market changes.
Recent reports indicate that Netflix's profits have decreased significantly in the recent quarter. The streaming company has attributed the drop to various reasons, including the ongoing effects of the COVID-19 pandemic and heightened expenses on content and marketing.
The company also disclosed that subscriber growth had slowed, with fewer new subscribers than anticipated. Despite the decline in profits, Netflix's revenue still grew by 24% year over year, which shows that the company is still generating considerable revenue despite the challenges it has faced. Netflix also stated that it intends to keep investing in content and expanding to new markets to drive future growth.
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