Netflix announced on Tuesday that it is moving ahead with its launch of a paid-sharing program in Q2 2023, targeting those who share passwords outside their households.
Netflix wrote in a letter to shareholders on April 18 that it had successfully tested paid sharing and is now ready for “a broad rollout, including in the U.S., in Q2,” per NBC News.
The streamer’s test zeroed in on markets in New Zealand, Canada, Portugal, and Spain earlier this year, as The Dallas Express previously reported.
With the new paid-sharing program, users will be required to set a primary location for their accounts. Devices connected to it will be verified via their IP addresses and device IDs.
An option will be available to users wishing to add an extra member sub-account accessible to up to two people they don’t live with for an additional fee.
Otherwise, any unreported device that attempts to access a Netflix account from a different location will eventually be blocked, per Variety.
This crackdown is in response to what Netflix has claimed are the over 100 million households worldwide using the streaming service via shared passwords, per Variety. This violation of its rules amounted to a net loss of 200,000 subscribers in Q1 2022.
“This will not be a universally popular move,” as co-CEO Greg Peters explained in a Q4 2022 earnings interview, per Variety. The company is anticipating a “cancel reaction.”
Yet the smaller rollout did see subscriptions rebound after an initial drop in Canada. There are more paid memberships in Canada than prior to the launch of paid sharing, per NBC News.
Overall, Netflix reported adding 1.75 million subscribers as the result of its test rollout, per CNBC.
Yet due to this negative growth impact expected in the near term, Netflix did push the larger rollout of the paid-sharing program from Q1 to Q2 2023.
When subscriptions pick back up, the streamer plans to invest roughly $17 billion in developing original content in 2024. This is a slight bump from the $16.84 billion that it paid out in 2022.