Netflix has always seemed to let users share passwords or password sharing even though they are not at home or with friends, even though it is not allowed. However, in the face of increasingly fierce competition and a decline in paid subscribers, it is likely that a raid will be carried out on this practice.
As reported, Netflix lost about 200,000 paying subscribers in its latest financial report and cut the company's valuation to USD 50 billion. Even Netflix predicts it could lose up to 2 million paid subscribers in the second quarter.
So Netflix also took anticipatory steps by warning that a global raid on sharing practices that were not in accordance with the rules would be carried out. It seemed that this time, their warning was serious as it was in a depressed position.
As quoted by us from CNBC, Netflix estimates that more than 30 million households in the United States and Canada share passwords, plus another 100 million worldwide.
Netflix admitted that they had previously deliberately allowed password sharing to be done carelessly because it made users feel at home on their service. But due to intense competition in the online streaming business lately, for example from Disney and Warner Bros., Netflix wants more users to pay for its services.
"The relatively high penetration of households, when coupled with the large number of households sharing passwords combined with competition, has created a barrier to revenue growth," Netflix said.
Currently, Netflix has been trialling methods to prevent password sharing for users outside the home, in countries such as Chile, Costa Rica and Peru. The method will probably be applied to the rest of the world, but it will still take time to implement it.