The latest earnings report for the fourth quarter of 2022 was not what was expected Netflix. The economic losses have led the series and film platform to reimplement its extra payment function for password sharing, the same one it has done in Argentina and several Latin American countries.
Netflix will begin cracking down on household password sharing in March, when it ends its Q1 2023 phase, according to US site Techradar. The announcement comes after the departure of its CEO, Reed Hastings.
Originally, the big “N” was supposed to implement the measure by the end of 2022. While they missed the deadline, that hasn’t stopped them from continuing with their plans to stop their users from sharing their password.
Essentially, the streaming platform claims this mechanic weakens its position against Disney Plus, Amazon Prime Video or HBO Max. Or, in his own terms, the extensive sharing of passwords among millions of people “undermines our long-term ability to invest in and improve” his platform.
The Netflix plan failed in Argentina
The scheme they set out to promote globally had its test phase in ArgentinaEl Salvador, Guatemala, Honduras and the Dominican Republic, but it didn’t do well among Latin American subscribers.
Netflix’s attempts to get users to subscribe to its “Add a Home” feature haven’t helped either. The add-on, which allows customers to add separate households and all of their occupants to their accounts for a small fee, confuses matters further.
To ensure that the new terms of service are respected, Netflix will check against the connection IP of the device you access with: this way you will know if they share the same password between multiple users.
When you connect to the internet from a device, Netflix identifies the IP number and the network it is connected to.
Also, to verify this, the platform will send a link to the email address or phone number associated with the primary account owner.
However, the problems caused by that “Add Home” function did not force the company to rethink its commercial strategy.
Netflix still intends to roll out its payment sharing feature more broadly in 2023, even if some users oppose it.
Netflix grows in subscribers
At the same time that it expects to raise more money from its subscribers in the coming months, Netflix said Thursday it had grown its subscriber base by 230.75 million, far exceeding its forecast and market expectations.
The streaming service almost lost 1.2 million subscribers in the first half. However, it resumed attracting millions in the third quarter, only to gain 7.66 million new subscribers between October and December, much more than expected.
The platform has benefited from new seasons of successful series such as ‘The Crown’, about the British royal family, and ‘Emily in Paris’, but also from new programs, such as the documentary series ‘Harry & Meghan’ and the popular series ‘ Wednesday”.
But Netflix remains “under intense pressure to course-correct and deliver better outcomes for its shareholders,” said Insider intelligence analyst Paul Verna, after “its shares lost more than 50% of their value in 2022.”
In the fourth quarter, the Californian company entered at 7,850 million dollars, but generated only 55 million of net income, well below the 257 million expected by the market.
Netflix took steps last year to generate new revenue streams, which should pay off this year.
Specifically, in November the platform launched a new, cheaper, ad-supported subscription, a less glamorous alternative it had long avoided.
“This is the beginning of a turning point for the company,” Verna said. “We expect a relatively weak start, with ad revenue of $830 million in 2023.”
Linda Price is a tech expert at News Rebeat. With a deep understanding of the latest developments in the world of technology and a passion for innovation, Linda provides insightful and informative coverage of the cutting-edge advancements shaping our world.