Netflix is reportedly planning to implement a paid password sharing system by June 2023, due to the success of its ad-supported version and a record high of 232.5 million subscribers in Q1 2023. The company has decided to delay its password sharing crackdown in order to improve user experience, and expects to roll out the new system before June 2023.
The system would require members to pay an additional fee for the consumption of content beyond a designated number of accounts. Netflix believes that this new system will benefit both members and its business.
Netflix has also introduced a new ad-subsidised subscription tier, which has received positive initial results, with “very little switching” from its standard and premium plans. Market tracker Insider Intelligence predicts that Netflix will earn $770 million in ad revenue from the new tier this year, with this figure expected to exceed $1 billion in the following year.
In response to the slowdown of subscriber growth, Netflix has been developing a lower-priced subscription tier with advertising. This has helped the company in creating an ad-supported version, which has contributed to the current high number of subscribers.
Additionally, Insider Intelligence has forecasted that for the first time in history, US adults will spend more time watching digital video on platforms such as Netflix, TikTok, and YouTube than traditional television. The company expects that traditional TV will account for less than half of daily viewing for the first time, dropping to under three hours, while daily digital video watching will climb to 52.3% with 3 hours and 11 minutes.
Principal analyst Paul Verna says that this milestone is driven by people spending more time watching video on their biggest and smallest screens.
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