Netflix’s contentious password-sharing ban is now in effect in the United States. The video content distributor announced the news in a blog post on Tuesday. In addition to the United States, Netflix has announced that the crackdown would be implemented in the whole world. Among the regions are the United Kingdom, France, Germany, Mexico, Brazil, Singapore, and Australia.
“Netflix account is for use by one household,” the company stated in the blog.
In early February, Netflix expanded their crackdown to encompass other countries. Among the countries are Canada, New Zealand, Portugal, and Spain. Furthermore, the crackdown included several test countries like Chile, Costa Rica, and Peru. The company initially stated that “a broad rollout” of the policy would take place this quarter.
Netflix Introduces New Features
Netflix noted it listened to member comments and created several features to provide a convenient experience for certain consumers. Subscribers who share their Netflix account with people outside their household are going to have greater options and control.
Netflix shares jumped after the news before falling 2 per cent. Investors were sceptical that a restriction on the password-sharing feature will deter users.
Despite many consumers’ reservations, Wall Street experts remain optimistic about the plan. It emphasized its position as a long-term growth driver, coupled with the recently announced Netflix tier that supports ads.
“We expect a lot of noise in 2Q23,” Jefferies stated in a message to clients last month. “[We] are being very conservative in our own modelling of churn in response to password crackdown.”
However, he said that they believe that most of that volatility will be spontaneous. This is due to the fact that it has little effect on current users. “Those members will return to the service over the course of 2023,” he said.
Jefferies advises buying any share decline connected with a cautious 2023 forecast.
Among those longer-term income sources, he emphasised that Netflix has the potential to be the number one video content distributor. Content spending control will “jumpstart” margin and free cash flow development initiatives.
Netflix Shares Lose One Quarter Of Their Value
