Netflix's latest letter to shareholders suggests the worst has passed for the streaming giant, and with growth back on track, the implementation of anti-password sharing policies and solutions will start to roll out next year.
The crackdown on customers' account-sharing habits has been a priority for Netflix for most of 2022, with the idea first being named before the company saw a big wave of subscribers leave the platform in April. All this led to some experiments being carried out in some minor markets, although in countries like Costa Rica, Peru and Chile, Netflix's anti-password sharing measures were a mess, and not necessarily due to extra costs, but rather to how confusing the restrictions were for users.
This topic again came up in Netflix's quarterly earnings report this Tuesday, with the official transcript outlining “we’ve landed on a thoughtful approach to monetize account sharing and we’ll begin rolling this out more broadly starting in early 2023.” Although no exact dates or list of countries was given, one recent measure already in place was mentioned: the option for “borrowers to transfer their Netflix profile into their own account,” where the paying customer would “kick out” a profile that would then be prompted to sign up by themselves with a new email address. Similarly, there's the possibility of creating “sub-accounts” at an extra cost, all handled by a single user, in case they wanted to pay for their family or friends.
All of this comes on the back of Netflix announcing its new ad-supported plan, Basic with Ads, launching in November in limited countries. Nevertheless, the letter mentions executives expect “the profile transfer option for borrowers to be especially popular” in countries with cheaper monthly subscriptions. Netflix also doubled down on its intention to continue venturing into gaming, “With 55 more games in development,” while also praising the performance of non-English content.
One noteworthy point is that Netflix is still a firm believer in the bingeable release model where all episodes for a particular season are dropped on day one, as the company argues that helps content like Squid Game and Cobra Kai “drive substantial engagement" online, with Monster: The Jeffrey Dahmer Story being the latest example. Netflix addressed its competitors by noting that every single one of them is losing money, a statement that’s validated by Disney's own estimations that its streaming platform won’t become profitable until 2024, with Hulu being the only other outlier in green numbers.
Overall, Netflix seems to have fought through its toughest times quite valiantly, with predictions for Q4 pointing to even more subscribers coming in. As if that wasn’t enough, the latter part of 2022 also brings some of Netflix's most promising releases this year.
Source: Netflix