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Netflix to crack down on password sharing in U.S. by July

Executives say the strategy will likely lead to a dip in subscribers, but is better for the company over the long term.

Executives say the strategy will likely lead to a dip in subscribers, but is better for the company over the long term.

A smart television set running the Netflix application.
A smart television set running the Netflix application. (Stock image via Pixabay, Graphic by The Desk)

Executives at Netflix will start cracking down on password sharing among its customers in the United States by July 1, broadening a rollout of its anti-freeloading policy that has been implemented in some other countries.

The affirmation was made on a quarterly earnings call held this week, during which some executives said the company planned to implement its password-sharing crackdown strategy in the United States by the end of its second financial quarter.

Few details have been offered on how Netflix intends to crack down on password sharing domestically. The company has 74.4 million paid accounts in the United States and Canada, with customers shelling out at least $8 a month for access to Netflix’s library of TV shows, movies, documentaries and stand-up comedy.

Netflix recently began tightening the belt on freeloading streamers in some Latin American countries, offering subscribers a way to pay more to share their accounts with people who live outside their immediate household. The move was partially blamed for a drop in Netflix subscribers in affected countries, where 450,000 ditched their paid memberships during its first financial quarter of 2023.

Related: Netflix grows global subscribers during Q1 2023

This week, Netflix executives warned investors that the crackdown on password sharing would likely lead to a short-term loss of revenue, but said the plan was worth it over the long haul as it expects some freeloading streamers to convert to take up its lower-cost, ad-supported option or one of its premium streaming plans.

Netflix is also winding down its iconic DVD-by-mail rental business, which was the cornerstone of the company when it launched, officials confirmed on Tuesday. The company will mail its last DVD in late September.

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About the Author:

Matthew Keys

Matthew Keys is the publisher of The Desk and reports on the business and policy matters involving the broadcast television, streaming video and radio industries. He previously worked for Thomson Reuters, Disney-ABC, Tribune Broadcasting and McNaughton Newspapers. Matthew is based in Northern California, has won numerous awards in the field of journalism, and is a member of IRE (Investigative Reporters and Editors).