Netflix is planning to crack down on common subscriber tricks

Netflix has revealed measures to push down on password sharing, which the streaming service giant estimates costs it billions of dollars each year. In a shareholder letter dated Jan. 19, the firm announced that it aims to expand paid sharing later in the first quarter. “Today’s extensive account sharing (100 million or more homes),” according to the letter, “undermines our long-term capacity to invest in and develop Netflix, as well as expand our companies.” The firm has been working on new features that will improve the Netflix experience, such as the ability for subscribers to see which devices are using their account and move a profile to a new account.

Although Netflix’s fourth-quarter earnings were lower than predicted, the firm attracted more customers to its expanded streaming platform than Wall Street expected. Furthermore, the firm stated that Reed Hastings will step down as co-CEO to become executive chairman. Cowen & Co. analysts predict that by cutting down on password sharing, Netflix could generate $1.6 billion in global revenue per year. According to Citi analyst Jason Bazinet, U.S. streaming video firms, including Netflix, lose around $25 billion in potential income each year as a result of password sharing, with Netflix responsible for about 25% of that total, or roughly $6 billion in revenue.