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Netflix will start cracking down on people who share their passwords this quarter

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Photo Illustration by Omar Marques/SOPA Images/LightRocket via Getty Images

Netflix has long groused about the possibility of charging customers who share their passwords extra, but now there appears to be a definite plan in place to do just that, in short order. According to a new report from Forbes, the streaming giant is set to begin offering a paid option for customers who want to share their passwords outside their own household "later in the first quarter" of this year — which means sometime before the end of March.

Netflix made the change official in a shareholder letter that laid out a vision for the company's future. The letter did not indicate how much the extra paid option will cost or set a firm date for implementation, other than noting that it will occur in the first quarter of this year. As Forbes points out, however, this option is available in some countries currently for $3 a month, so it is expected to still be much less expensive than having two separate Netflix accounts.

The letter indicates that Netflix is aware that some customers may cancel their subscriptions as a result of this change, but states that Netflix still expects to come out ahead in the end from a revenue and profit standpoint. "From our experience in Latin America, we expect some cancel reaction in each market when we roll out paid sharing, which impacts near term member growth. But as borrower households begin to activate their own standalone accounts and extra member accounts are added, we expect to see improved overall revenue, which is our goal with all plan and pricing changes," the letter said.

The letter also indicated that Netflix has continued to experience revenue growth during each year since the pandemic began, and has maintained an operating margin of about 20% consistently. The company's stated goal is to continue to grow revenue each year. Netflix's relatively rosy financial outlook stands in stark contrast to many other tech companies, who have recently undergone massive layoffs in response to market shifts.

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