Password sharing ‘breaks’ business, warns crackdown to intensify

Netflix (NFLX) Cheap eaters, beware! The company is stepping up its crackdown on password sharing.

The company warned in a quarterly letter to shareholders of an intensified crackdown on password sharing following its fourth-quarter earnings report on Thursday that showed stronger-than-expected subscriber numbers.

“Later in the first quarter, we expect to begin rolling out paid sharing more broadly. Broad account sharing today (over 100 million households) undermines our long-term ability to invest in and improve Netflix and build our business,” Netflix said.

The company explained that it has been building additional new features to improve the overall Netflix experience, including the ability for members to see which devices are using their account and transfer profiles to new accounts.

Members can also pay an additional fee if they want to share the platform with people who don’t live there.

“If we make this transition — if some borrowers stop viewing because they don’t switch to additional memberships or fully paid accounts — short-term engagement, as measured by third parties like Nielsen’s The Gauge, could be negatively impacted,” Netflix said.

However, the company pointed to recent testing in Latin America, which showed a steady increase in engagement over time as borrowers signed up for their accounts and posted new content.

Netflix steps up crackdown on password sharing

Netflix steps up crackdown on password sharing

Investors will be watching the company’s earnings call closely for more updates on its crackdown on password sharing, in addition to its new ad-supported tier.

Netflix sees both moves as profit drivers, especially as competition in the streaming space continues to escalate: “As always, our North Star remains delighting our members and building greater monetization over time. capability,” the streamer said.

Quarterly net additions rose 7.66 million, up from company’s 4.5 million, thanks to a string of high-profile, record-breaking content releases, including “The Glass Onion,” “Trolls,” “All Quiet on the Western Front,” and “My Name.” The guides are Vendetta” and “Wednesday.”

While the company missed both revenue and profit, guidance was strong, with first-quarter 2023 revenue expected to be $8.17 billion and EPS expected to be $2.82.

During the earnings release, Netflix co-CEO and co-founder Reed Hastings announced that he was stepping down from leading the company. COO Greg Peters will join current Netflix co-CEO Ted Sarandos in the role. Hastings will now serve as the company’s executive chairman.

Shares of Netflix rose 6% in after-hours trading after Thursday’s results.

Netflix stock has been soaring in recent weeks, gaining about 60% in the past six months, including a gain of about 10% so far in January, beating the Nasdaq Composite’s 5% gain.

Alexandra is a senior entertainment and media reporter for Yahoo Finance.Follow her on Twitter @alliecanal8193 and email

Click here to view the latest stock market trends on the Yahoo Finance platform

Click here for the latest stock market news and in-depth analysis, including events affecting stock movements

Read the latest financial and business news from Yahoo Finance

Download the Yahoo Finance app apple or android

Follow Yahoo Finance Twitter, Facebook, instagram, activity board, LinkedInand youtube

Source link