The streaming giant Netflix
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It has long since declared war on the sharing of passwords which causes it great losses. Now the company is revealing the first details of how it intends to do this.
According to the Netflix Help Center, subscription accounts will remain shareable but only within one household. As a result, Netflix will require users to set a “primary location” for all accounts residing in the same household. Users will need to log into the main location’s home wifi at least once every 31 days to ensure their device is not blocked. The company said it will use information such as IP addresses, device IDs and account activity to determine whether a device logged into the account is connected to the primary location.
When someone logs into an account from a device that is not part of the main location, or if it is accessed continuously from another location, it is likely that they will be blocked. To get around this, the primary account holder will need to authenticate the device with a temporary code. Once verified, the traveling member can watch Netflix for seven consecutive days. It is not yet clear whether it is possible to request multiple temporary codes after the seven-day period to avoid paying for another account.
Netflix has warned that it will increase its efforts to fight password sharing. “Later in the first quarter, we expect to begin rolling out paid sharing more broadly. Today’s widespread account sharing (100 million households) undermines our long-term ability to invest in and improve Netflix, as well as build our business,” the company said.
Along with the password-sharing war, Netflix will also rely on its new ad-supported subscription tier to boost profitability, especially as streaming competition intensifies. Netflix told advertisers it saw a doubling of sign-ups for its ad lineup in January compared to December — a positive sign of subscriber momentum as the company struggles to boost its revenue.
Netflix reported that it added 7.7 million subscribers in the fourth quarter of 2022, well above expectations for the addition of 4.5 million net new subscribers in the quarter. The total number of subscribers increased to 228 million. The company brought in $7.85 billion, but on the bottom line it posted an adjusted profit of 12 cents per share, when the market expected 42 cents per share. Netflix is also not impressive in the forecast for the next quarter and expects revenues of $8.17 billion, in line with analysts’ expectations, but a profit per share of $2.82 compared to the expectation of $2.99 per share. The meaning: the future profit multiplier: 31. The company also expects a deterioration in the operating profit line so that it is expected to drop to 19.9% compared to the 21.2% expected by the analysts and significantly lower than the 25.1% in the first quarter of 2022.
The company’s stock trades for $356.5 and a market value of $158.8 billion.
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