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Netflix Will Start Charging Users for Password Sharing in March

Netflix will stop subscribers from sharing passwords with members living outside their homes as early as March this year. The streaming giant claims that the widespread sharing of passwords affects its ability to evolve the platform.

In a letter to shareholders late last week, the company said it would “roll out paid sharing more broadly” late in the first quarter of 2023.

“Today’s widespread account sharing (100 million + households) undermines our long-term ability to invest in and improve Netflix and build our business. While our terms of use limit the use of Netflix to a household, we recognize this is a change for members who share their accounts more broadly. So we’ve worked hard to build additional new features that improve the Netflix experience.”

Members will still “have the option to pay extra if they want to share Netflix with people they don’t live with.” Otherwise, subscribers can transfer an existing user profile to a new account, allowing viewing history, recommendations, the “my list” feature and other data to be copied over.

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Netflix previously hinted at discontinuing its password-sharing feature back in July 2022. The company described last year as “tough.” In the first quarter, it suffered its first subscriber loss in over a decade, losing 200,000 users.

The company has not disclosed the fee it will charge for password sharing nor stated how they plan to enforce the new pricing structure. Currently, Netflix can tell when users log in outside their primary household based on their IP address, device IDs, and other information.

In March 2022, Netflix rolled out paid sharing in Costa Rica, Chile, and Peru, charging users a fee to add two “subaccounts” to a primary account. Users found the policy confusing, and many could still share their passwords without repercussions. 

An anonymous Netflix customer service representative told Rest of World that “she was instructed that if a subscriber called arguing that someone from their household was just using the account from another location, she should inquire further and tell the subscriber that they could use their account without extra charge via a verification code.” Many of the representatives still needed more clarification about the policy.

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Other users in those countries canceled their subscriptions after receiving news of the oncoming fee. The shareholder letter stated that Netflix expects engagement to fall in the short term but will pick back up soon after.

“As we work through this transition – and as some borrowers stop watching either because they don’t convert to extra members or full paying accounts – near-term engagement, as measured by third parties like Nielsen’s The Gauge, could be negatively impacted. However, we believe the pattern will be similar to what we’ve seen in Latin America, with engagement growing over time as we continue to deliver a great slate of programming and borrowers sign-up for their own accounts.”

The anticipated sharing fee comes on the heels of a new subscription tier that Netflix started offering in November, which provides customers with a cheaper “Basic With Ads” subscription option. In exchange for $3 off a monthly subscription, viewers are served up to five ads an hour. Netflix claims that rolling out the new option led to member growth.

“Engagement, which is consistent with members on comparable ad-free plans, is better than what we had expected, and we believe the lower price point is driving incremental membership growth. Also, as expected, we’ve seen very little switching from other plans. Overall the reaction to this launch from both consumers and advertisers has confirmed our belief that our ad-supported plan has strong unit economics (at minimum, in-line with or better than the comparable ad-free plan) and will generate incremental revenue and profit, though the impact on 2023 will be modest given that this will build slowly over time.”

Huawei Smartphone

Huawei Hits Back At Trump Administration After Still Being Blacklisted As Part of America/China Trade War

Huawei’s Chief Security Officer Andy Purdy has hit back at claims Chinese companies pose a security threat, made recently by US Attorney General William Barr who stated they ‘cannot be trusted’.

Barr has backed a proposal which would see rural wireless carriers prevented from utilizing an $8.5 billion government fund which would enable them to purchase services or equipment from Chinese firms.By blacklisting Chinese companies, including Huawei and other technology companies such as ZTE Corp, American jobs are being damaged, causing stress and worry to homes across the country.

The former Homeland Security official spoke with “Squawk Box” and said, “If we hurt Americans to hurt China, we haven’t improved our position. Two hundred American companies are waiting to sell nonstrategic parts to Huawei. Forty thousand American jobs are at risk, and if we have to, we will go overseas and buy them.” However Mr Barr has stated that “we should not signal that Huawei and ZTE are anything other than a threat to our collective security, for that is exactly what they, through their actions, have shown themselves to be.”

Yet Huawei has confirmed “in 30 years of business, Huawei has never had a major security related incident in the 170 countries where we operate.”

Some of the accusations seem to have come from the fact Huawei were charged by federal prosecutors for violations of the U.S. embargo on Iran, obstruction of justice, bank fraud and trade secret theft. In 2017 ZTE pleaded guilty to illegally sending around $32 million in U.S. goods to Iran. This has resulted in the Federal Communications Commission Chairman Ajit Pai announcing the commission, “cannot ignore the risk that the Chinese government will seek to exploit network vulnerabilities in order to engage in espionage, insert malware and viruses, and otherwise compromise our critical communications networks.”

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With America locked in an 18 month trade war with China, both countries are aiming to finalize a ‘phase one’ agreement allowing China to not only address intellectual property protections but to also purchase U.S. farm goods.

But the Trump administration’s concerns regarding the communist Chinese government’s association to industry and its habit of subsidizing different sectors – including technology – will be discussed at a later date.

Huawei have been at the forefront of President Trump’s worries and the powers that be in Congress have concerns that the technology giant is establishing itself in America unfairly, with the U.S. market gaining smartphones as well as next-generation 5G wireless networks thanks to help from the Chinese government. It is these very practices that has led the way to accusations about the prospect of the equipment being used for spying purposes in the future, hence the ‘security threat’ claim.

However Purdy has confirmed that Huawei would be able to put procedures in place to ensure national security and has insisted they would never assist the Chinese government in such covert ways: “We’re happy to talk to the government about effective measures that can be implemented.”

It was a surprise to many around the world that the U.S. government added Huawei – as well as several other Chinese companies – onto the Commerce Department’s ‘entity list’ with ‘national security’ listed as the reasons.

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This meant that Huawei were unable to purchase any American software unless they had a U.S. Government license, meaning deals could not be made with companies including Micron or Alphabet’s Google.

Some companies have since been removed from the list however the licenses for U.S. companies to sell components to Huawei are still being looked into, with Commerce Secretary Wilbur Ross confirming the licenses would be coming ‘very shortly’.

A proposal regarding carriers to remove and replace equipment from Huawei, as well as ZTE Corp and other Chinese companies deemed a security threat, will be discussed on November 22nd with a vote taking place the same day.

Many have wondered if Huawei would be big enough to survive such measures. After they were placed on the ‘entity list’ American corporations including Google stopped working with them bringing predictions that they would soon cease to trade. However Huawei has far exceed not only the world’s expectations but their own too.

When the trade ban was put in place, Huawei Chief Executive Office Ren Zhengfei predicted their revenue would drop by about ‘$30 million compared to forecasts’ with $100 billion being the target for the year. Yet this does not seem to be the case with a 24.4 per cent increase in generated revenue indicating the technology giants should comfortably clear the $100 billion mark.

This is due in part to Huawei earning around 50 per cent of its revenue from their consumer division – smartphones in particular, with 185 million units shipped this year. And thanks to its year-on-year growth not only have Huawei’s fortunes not dipped, they have actually gained traction against Samsung, meaning if they had not been ‘blacklisted’ they could easily have become the world’s biggest smartphone manufacturer.