Streaming video service Netflix announced the extension of the ban on free account sharing through the end of Q1 2023, and also announced the resignation of its CEO.
Netflix CEO Reed Hastings, who led the company for 25 years, is stepping down to be replaced by co-CEO Ted Sarandos and former COO Greg Peters. Mr. Hastings will not leave the company – he will take over as Executive Chairman.
Netflix is aware that charging additional fees for sharing accounts between multiple households will lead to some churn, but the additional revenue from those who comply with the new rules will do so over the long term “Increase in Total Income”. The service announced the initiative long ago and in October simplified the process of transferring access to a profile, as well as managing an account with the ability to disable unwanted clients.
The service is currently testing different ways to combat password sharing by circumventing the rules for users in South America: In Chile, Costa Rica and Peru, the system offers to pay a surcharge for systematic use. However, Peruvians, according to Netflix, say they have not been properly briefed on the tightening of the policy so far, and charging additional fees has met with mixed success. For users in Argentina, El Salvador, Guatemala, Honduras and the Dominican Republic, the company also offered a mechanism to purchase additional “houses” for family members living at different addresses.
Netflix has to grapple with these issues to keep investors happy, as subscriber growth is again weak: in the fourth quarter of 2022, their number rose by 7.6 million, which is higher than analysts’ expectations but below the 8.3 Millions who came right into Period Period 2021. In the past several months, the platform has once again spawned some undeniable hits, including feature film Knives Out: The Glass Onion, Wednesday series and mini-documentary mini-series Harry and Meghan. In November, Netflix rolled out a new low-cost ad-supported plan, the company said “Satisfied with the first results”although they may not be ideal: it is estimated that 9% of new customers took advantage of the offer in November and another 15% opted for this plan in December.