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Netflix Internally Announces When It Will Crack Down on Password Sharing — and Initiate Another Unpopular Move

The streaming giant is fighting to make up for lost revenue and subscribers.

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Netflix's recent struggles have been splashed across headlines for weeks, and in an effort to safeguard subscribers after a staggering 200,000 net loss in Q1 of 2022 — the company's biggest dip in a decade — the streaming giant is adapting its strategy out of necessity.

Part of Netflix's switch-up includes a crackdown on password sharing, and now, despite previous comments to the contrary, the introduction of ads to the platform, which will roll out earlier than anticipated, per a new report in The New York Times.

Related: 5 Takeaways From Netflix CEO's New Book

According to two anonymous company sources, an internal note from executives stated the company plans to introduce an ad tier in the final three months of 2022; it will also put a stop to password sharing around the same time. The note invoked streaming competitors, such as Hulu and HBO, which have successfully incorporated advertising without sacrificing the strength of their brands. 

The plans mark a change in course for the company. In March, Netflix CFO Spencer Neumann told a crowd at Morgan Stanley's Technology, Media and Telecom Conference in San Francisco that the company would be unlikely to follow in Disney's unpopular footsteps and begin advertising. "It's not like we have religion against advertising, to be clear. We lean into consumer experience, consumer choice, and what's great for our creators and storytellers. [Advertising is] not something that's in our plans right now," he said. 

Related: Netflix's Company Culture Scares Off Some Potential Hires — and That's a Good Thing

In another attempt to make up for lost revenue and subscribers, the streaming giant hiked up subscription rates in January, bumping standard plans in the U.S. and Canada from $13.99 to $15.49 and premium plans from $17.99 to $19.99. 

As the streaming landscape becomes ever more crowded, it remains to be seen just how much Netflix will have to transform its original model to remain relevant and competitive. 

The company is down nearly 50% month over month. 

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