A crew of sober Netflix execs said a password-sharing crackdown on the army of 100 million viewers who use the service for free is front and center and being tested but could take about a year to roll out, and it’s not clear what it will look like.
“We’ve just got to get paid for them to some degree for them,” founder-CEO Reed Hastings said Tuesday on a video Q&A after the company released its first-quarter earnings.
The streamer’s been working on password-sharing solutions for almost two years but when the business was growing fast, it didn’t matter that much. It does now, as the stock plunged 25% in after-market trading today on soft subscriber and revenue growth.
“I know it’s disappointing for investors [but] we are really geared up. This is our time to shine. This is our time to get back into investors’ good graces,” he said.
A hundred million Netflix viewers, including 30 million in the U.S. and Canada, use other peoples’ passwords to log in — a huge number on a total subscriber base of 220 million.
Exes said Netflix started some light test launches over a year ago and just concluded a first big country test (didn’t say where). A solution will take a while to work out, likely requiring “a year of iterating and deploying” it globally, including in the U.S., said COO Greg Peters. The idea, he suggested, isn’t to wipe out password sharing but charge people to do it. In the process, the company will be focusing more on revenue and “subscriber accounts” versus a fixation on individual subscriber numbers that drove the shares lower today.
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It will also continue to focus on creating popular content and on what was probably the blockbuster news of the day, creating a new add-supported tier.
Co-CEO and chief creative officer Ted Sarandos said the company’s weathered downturns before. “They don’t feel great at the moment, but man it feels great to come out on the other side of it, and we know we will come out on the other side,” he said.
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