Say goodbye to Netflix password sharing and say hello to ads

Netflix looks set to implement some of the biggest changes to its business model in years. In the company’s Q1 2022 earnings call, CEO Reed Hastings dropped two bombs.

Netflix lost subscribers

First: Netflix lost subscribers for the first time in a decade – 200,000 to be specific. That’s a far cry from the 2,000,000 subscribers the company predicted would gain just three months ago.

It’s worth noting that Netflix is ​​in the red in its subscriber count in part because of Russia’s invasion of Ukraine – it lost 700,000 accounts after terminating its services in Russia. Still, even ignoring that chunk of bills, Netflix fell well short of expectations.

To continue to fight the dwindling growth, Netflix plans to crack down on password sharing, something Hastings has called a “positive thing” on multiple occasions.

On today’s conference call, Hastings said “we just have to get paid for them,” referring to the estimated 100 million viewers who use the service for free. Netflix says its anti-password sharing system will take about a year to roll out globally.

The crackdown on password sharing is not a big surprise. I imagine most Netflix users knew this was coming eventuallybut Netflix was still growing fast enough that the company didn’t consider password sharing a major issue.

The company has been testing password-sharing bans for a few months now. That said, COO Greg Peters indicated that Netflix might not completely eliminate password sharing, but rather charge people for it. That suggests the company might consider offering a shared plan to people who don’t live in the same house, though Peters didn’t specify as much.