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Netflix “satisfied” with password-sharing crackdown, co-CEO says

Company moved deliberately to curb freeloaders on its service.

Company moved deliberately to curb freeloaders on its service.

Streaming service Netflix is “completely satisfied” with the pace of its global password-sharing crackdown, the company’s co-CEO Ted Sarandos said on Tuesday.

The comment was made at the UBS Global Media and Communications Conference, during which Sarandos addressed the company’s reversed thinking on customers sharing passwords with non-paying viewers of its content.

For years, Netflix turned a blind eye to freeloaders on its platform, finding the practice to be a good window-shopping technique for viewers who might ultimately be convinced to pay for their own accounts.

With renewed pressure from investors to generate additional returns on its content, Netflix began taking a different approach toward password-sharing last year, implementing a crackdown on the practice that started first in several Latin American countries before moving to other regions earlier this year.

“It was good to take it slow,” Sarandos said. “That’s why we didn’t do it in one fell swoop.”

The end result is something of a mixed bag for Netflix: Subscriber churn crept up in the months after the company implemented its crackdown on password sharing in Latin America, but domestic subscribers in the U.S. and Canada increased following similar efforts there.

Streamers who still want to share their password with others outside their immediate household have the option to pay extra for the privilege, with Netflix charging around $7 extra per month if customers want to share their account information with non-subscribers.

Like other streaming services, Netflix has also implemented steady price increases on its more-premium tiers, with its all-inclusive Premium plan now costing subscribers $23 per month, up from its previous price of $20 per month.

Netflix is hoping customers who feel priced out of its premium plans will take its ad-supported tier instead, which costs a more-modest $7 per month and includes short commercial interruptions before and during its movies and TV shows.

Sarandos said Netflix is on track to introduce even more movies and TV series through its streaming service next year, especially now that the industry has resolved the months-long writers and actors strike that ground Hollywood production to a halt.

“We are mostly just thrilled that the strikes are behind us,” Sarandos said on Tuesday.

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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).