According to a recent Forbes report, Netflix plans to begin offering a paid option for customers who wish to share their passwords with individuals outside their household in the near future. The company has previously expressed concerns about password sharing, but it now appears that they have a definite plan to implement this change in the first quarter of this year. This means that the feature is expected to be available by the end of March.
Netflix made an official announcement in a shareholder letter, outlining a vision for the company's future, which includes offering a paid option for customers who wish to share their passwords with individuals outside their household. The letter did not specify the cost of this option or provide a specific date for its implementation, only noting that it will be available in the first quarter of this year. Although, as Forbes reported, the option is already available in some countries for $3 a month, making it much less expensive than having two separate Netflix accounts.
In the letter, Netflix acknowledged that some customers may cancel their subscriptions due to this change, however, it expects to benefit from this change in terms of revenue and profit. The letter said, "We expect some cancel reaction in each market when we roll out paid sharing, which impacts near term member growth. But as borrower households begin to activate their own standalone accounts and extra member accounts are added, we expect to see improved overall revenue, which is our goal with all plan and pricing changes."
Whether you’re sharing a Netflix password with someone or borrowing theirs, be prepared to start paying for it. https://t.co/N0Vl0vdY5c
— KTLA (@KTLA) January 23, 2023
The letter also highlighted that Netflix has seen revenue growth each year since the start of the pandemic, maintaining an operating margin of around 20%. The company aims to continue this growth in revenue in the future. This positive financial perspective is in contrast to many other tech firms who have gone through large layoffs due to market changes.
According to recent reports, Netflix's profits have dropped significantly in the recent quarter. The streaming giant attributed the decline to a number of factors, including the ongoing impact of the COVID-19 pandemic, as well as increased spending on content and marketing.
The company also reported that subscriber growth had slowed, with the number of new subscribers falling short of expectations. Despite the drop in profits, Netflix's revenue still grew by 24% year over year, which indicates that the company is still generating significant revenue despite the challenges it has faced. Netflix also announced that it plans to continue investing in content and expanding its reach to new markets in order to drive future growth.
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