Netflix plans to roll out advertising and make big password changes as subscribers leave

US streaming giant Netflix estimates that the service is shared with an additional 100 million households around the world, in addition to its nearly 222 million paying households

Netflix has announced that due to a sudden drop in subscribers, it could crack down on password sharing and introduce a subscription model with advertising — the first in more than a decade.

The US streaming giant is considering the change, which would end its longstanding reputation as an ad-free haven for TV viewers.

The company is going through a rough patch in terms of subscriber count, blaming password sharing among its members for the poor performance.

Netflix estimates that the service will be shared with an additional 100 million households in addition to its nearly 222 million paying households.

CEO Reed Hastings says the company is currently testing subscription models for password sharing.

Those piggybacking on someone else’s Netflix account can breathe a sigh of relief for now, as the company’s boss said reducing sharing “wasn’t a high priority to work on.”

Mr Hastings gave no details on how password sharing might be addressed and whether there would be a limit on the number of people who can use an account.

The company plans to expand a trial program it has been running in Chile, Costa Rica and Peru, allowing subscribers to extend the service to another household at a discounted rate.

Netflix has struggled with slowing revenue growth in recent months, caused by stiffer competition from competing services.

Yesterday, the company announced that it ended the first quarter of 2022 with 200,00 fewer subscribers than in the previous three months – missing its growth forecast by 2.7 million subscribers.

Netflix expects to lose two million more customers worldwide this quarter.

The end of the pandemic lockdowns that saw people watch TV and the rise of competing platforms like Apple and Disney have weakened Netflix’s dominant position.

The company’s decline in user numbers was partly due to its decision to withdraw from Russia in protest of the war against Ukraine, which resulted in a loss of 700,000 subscribers.

Netflix’s boss has said a separate, cheaper subscription plan with ads is being considered.

“Those who have followed Netflix know that I was anti-complexity of advertising and a big fan of the simplicity of subscriptions,” Mr. Hastings said The Wall Street Journal reports.

“But as much as I’m a fan of that, I’m a bigger fan of consumer choice.”

The company didn’t offer any additional information on how a cheaper ad-supported version would work or how much it would cost.