Netflix account sharing beyond your household is about to end. The streaming giant has announced that it will be rolling out paid sharing options soon.
Netflix said in its Q4 2022 earnings report that Paid Sharing will be rolled out “more broadly in Q1 23,” following its trial in parts of South America.
The company expects rollbacks, in response, in each market as the feature rolls out. But it also expects subscriptions to pick up in the second quarter, leading to an improvement in its overall revenue — the company’s main metric right now.
“The widespread account sharing that exists today (over 100 million households) undermines our long-term ability to invest in and improve Netflix and grow our business. Although our Terms of Service limit the use of Netflix to one household, we recognize that this is a change for members who share their account more widely,” Netflix explains.
Device verification
Paid account sharing will come with other new features for subscribers, including the ability to check which devices are using their account and transfer a profile to a new account. Subscribers will also be able to choose whether or not to pay for users outside of their household.
“As we roll out paid sharing, members in many countries also have the option to pay extra if they want to share Netflix with people they don’t live with. As is the case today, all members will be able to watch Netflix while traveling, on a TV or on a mobile device. »
In July, Netflix dropped its “add household” feature in Argentina, Dominican Republic, El Salvador, Guatemala and Honduras based on user feedback. Instead, Netflix allowed people not living in a subscriber’s household to transfer their Netflix profile to their own account and retain all of their recommendations and preferences when they start paying. Additionally, subscribers have the ability to pay for others by creating sub-accounts through an “additional member” option.
$2.99 for an additional member
Netflix did not reveal the price for paid sharing or the rollout schedule in different countries. In Costa Rica, the cost is $2.99 for an additional member.
Separately, Netflix co-founder Reed Hastings stepped down as co-CEO after leading the company for 25 years. He is now executive chairman. Netflix’s new executives are Ted Sarandos, current co-CEO, and Greg Peters, Netflix’s former chief operating officer.
Netflix’s other new revenue stream, advertising, launched in November in partnership with Microsoft. Netflix says its ad-sponsored subscriptions for $6.99 in the United States have attracted new subscribers. No premium subscriber, however, has switched to the ad-supported option, which offers fewer features, such as the inability to download content to watch offline. Netflix estimates that the impact of ads on its revenue will be modest in 2023.
The company’s paid subscriptions in Q4 2022 increased 4% year-on-year to 230.75 million, and revenue increased 1.9% year-on-year to $7.85 billion. The company has 7.6 million new subscribers worldwide, including 909,000 in the United States. But average revenue per member fell 2% year-over-year. Netflix largely missed its earnings per share (EPS), which came in at 12 cents versus the expected 36 cents. EPS is down from $1.33 in the fourth quarter of 2021.
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Source: ZDNet.com