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Struggling Netflix Set to Crack Down on 100 Million Users

The streaming giant Netflix will start cracking down on passwords sharing in the coming weeks, more precisely by the end of March. The announcement will not be welcomed by many subscribers, but it is something that has been on the pipeline for quite some time and comes as no surprise.

The announcement was made in a letter to shareholders, where the company revealed that more than 100 million households currently share their accounts with others,

This means that by the end of March, those who have a Netflix subscription may not be able to let people living in another house use their password to log into their account for free.

Netflix already tested charging for account sharing in Latin America, the plan is to expand this to a much larger proportion of the subscriber base. According to the company password sharing undermines the long term ability of Netflix to invest in and improve its services.

“While our terms of use limit use of Netflix to a household, we recognize this is a change for members who share their account more broadly. So we’ve worked hard to build additional new features that improve the Netflix experience, including the ability for members to review which devices are using their account and to transfer a profile to a new account. As we roll out paid sharing, members in many countries will 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 while traveling, whether on a TV or mobile device.” Netflix said.

“As we work through this transition and as some borrowers stop watching either because they don’t convert to extra members or full paying accounts near term engagement, as measured by third parties like Nielsen’s The Gauge, could be negatively impacted. However, we believe the pattern will be similar to what we’ve seen in Latin America, with engagement growing over time as we continue to deliver a great slate of programming and borrowers sign-up for their own accounts.” The company went on to say.

It is hard to predict the outcome of these measures but whatever the case, Netflix is expected to lose a number of viewers. The company is banking on a lower-cost, ad-supported tier that can absorb subscriber that would have otherwise cancelled their subscription altogether.

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