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Netflix’s password sharing will end, confirms new CEO

Netflix, a video streaming platform, confirmed to end password sharing this year and plans to introduce an advertising supported tier for the company. Recently, the new Co-Chief Executive Officers (CEO) Greg Peters and Ted Sarandos have provided more details on the end of password sharing in an interview with Bloomberg.

As per Peters, the video streaming platform will not sacrifice consumer experience, even after rolling out the controlled password sharing as it will be a graduated approach. He added that the majority of users who do not pay for Netflix but use it will have to eventually pay for the content.

He expressed that it will not be a universally popular sort of event, and that the company will possibly face some unhappy customers. Moreover, the CEOs emphasised that the company is planning to increase the subscriber base by 15 to 20 million with a focus in countries like India.

In the interaction, asking upon the number of people who will pay for the password sharing, Peters replied that the video streaming platform would like to win all of these users back by providing them content like ‘Glass Onion’ every week.

To recall, the OTT platform has recently launched a lower-priced, ad-supported tier in November which is available in 12 markets including the US, Australia, Brazil, Britain, Canada, France, Germany, Italy, Japan, South Korea, Mexico and Spain.

Paid net additions for Netflix stood at 7.7 million globally in the December quarter of 2022 versus 8.3 million in the same period in 2021. In the Asia and Pacific region, Netflix added 1.8 million paid members in the December quarter, lower than the 2.58 million added in the same period a year ago. The streamer doesn’t disclose India-specific numbers separately.

The fourth quarter saw year-over-year revenue growth of 2%, driven by a 4% increase in average paid memberships. ARM (average revenue per member) declined 2% year-over-year, but grew 5% on a foreign exchange neutral basis, Netflix said. Operating income of $550 million in Q4 was down versus $632 million in Q4 ‘21.

However, the company is likely to put in place curbs on password-sharing, which may add some extra subscribers.

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