Netflix CEO Admits Streamer Waited Too Long to Address Password Sharing

By Cameron Bonomolo - December 6, 2022 07:06 pm EST

Netflix subscribers' accounts "may not be shared with individuals beyond your household," reads a notice in the streamer's terms of service. In March, it was reported the Stranger Things and Squid Game streamer was testing a fee of $3-$4 in select countries for users who wished to share their accounts outside their households. After launching their $7-a-month Netflix with ads plan in November — as well as the Managing Access and Devices feature, enabling customers to log out of specific devices — Netflix Co-CEO Ted Sarandos is again speaking out on the company's efforts to curtail costly password sharing.

"It feels a lot like the way you manage a price increase. … Consumers aren't going to love it right out of the gate, but we need to show them why they should see value," Sarandos said of a Netflix password-sharing fee while speaking at the UBS Global Technology, Media & Telecom Conference (via Deadline).

Sarandos acknowledged the now 25-year-old company, which launched its streaming service in 2007, "went too long ignoring" password sharing. "We created a product that was not very easy for you to add your kids to and pay for that."

According to a 2019 study, Netflix loses upwards of $135 million a month — or $1.62 billion annually — due to customers sharing their accounts outside of their households. That same year, Netflix COO and Chief Product Officer Greg Peters said the company was exploring "consumer-friendly" ways to crack down on password sharing.

Netflix previously said password-sharing fees or its profile transfer feature for "borrowers" would begin rolling out next year.

"We've landed on a thoughtful approach to monetize account sharing and we'll begin rolling this out more broadly starting in early 2023," the company said in a quarterly statement. "After listening to consumer feedback, we are going to offer the ability for borrowers to transfer their Netflix profile into their own account, and for sharers to manage their devices more easily and to create sub-accounts ('extra member'), if they want to pay for family or friends. In countries with our lower-priced ad-supported plan, we expect the profile transfer option for borrowers to be especially popular."

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