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Netflix will crack down on password sharing this summer

Netflix’s long-awaited crackdown on password sharing is coming soon to the U.S., the streamer said on Tuesday.
Netflix originally planned to roll out “paid sharing” in the States during the first quarter of 2023. However, Netflix now says it’ll start rolling out the change — an update designed to convert account-sharers into paying users — a little later, on or before June 30.
This move is not limited to the U.S., either. “We are planning on a broad rollout, including in the US, in Q2,” the streamer said in its first-quarter 2023 earnings report. Alongside this announcement, Netflix also bid farewell to its 25-year-old mail-order DVD business. RIP.
Netflix’s quest to boost revenues by curbing password sharing kicked off earlier this year in Canada, New Zealand, Portugal and Spain. In these countries, Netflix requires paying users to set a “primary location” for their account. Going forward, if someone they don’t live with uses their account, Netflix alerts them to “buy an extra member.” Netflix says it will allow up to two extra members per account, and its fee per extra user varies by country. For example, it’s an additional CAD $7.99 in Canada and €3.99 in Portugal.
Speaking of revenue, Netflix fell short of analysts’ expectations for its first quarter of the year. The company said it brought in $8.16 billion during Q1 2023, while Wall Street anticipated a slightly higher figure — $8.18 billion. However, the firm reported higher-than-expected earnings of $2.88 per share in Q1; analysts had anticipated $2.86 per share.
Earlier in 2023, Netflix breezily summarized its paid-sharing update as a chance to clarify “confusion about when and how you can share Netflix,” but make no mistake, this is a crackdown. On Tuesday, Netflix played a similar tune, telling investors that the change “will result in a better outcome for both our members and our business.”
“We see a cancel reaction in each market when we announce the news, which impacts near-term member growth,” Netflix said. “But as borrowers start to activate their own accounts and existing members add ‘extra member’ accounts, we see increased acquisition and revenue.”
Netflix ended regular trading with its stock price at $333.70 per share. After hours, the company’s individual share price slipped below $307, before rebounding to about $330 (as of 2:58 p.m. PT).

Netflix kisses mail-order DVDs goodbye

Netflix will crack down on password sharing this summer by Harri Weber originally published on TechCrunch
Netflix will crack down on password sharing this summer

Netflix restructures its film units, aiming to make fewer (but better) original movies

Netflix is restructuring its film units and vowing to make fewer but better movies, according to a new report from Bloomberg, which Netflix partially confirmed. The report said the streaming giant is combining film units that produce small and midsize films, resulting in a handful of layoffs, including two longtime executives. Netflix told TechCrunch that these changes were made to simplify its structure and set it up for the next phase of its growth, but declined to comment on how many people were being let go.
Scott Stuber, chairman of Netflix Film, has been looking to scale back the company’s output of films to ensure that more of them are high quality, according to the report.
It appears that this change has already been implemented, as the report comes as Netflix recently revealed its 2023 original films lineup, which consists of 49 titles. In comparison, the company had 85 original films in its lineup last year. For context, a Netflix original refers to both the content that has been produced in-house and the content to which it owns the distribution rights. It’s unclear for now if Netflix would also be scaling back the addition of originals that it didn’t produce, but obtained the rights to — a move that would impact the output of new originals on the service.
One of the executives leaving the company is Lisa Nishimura, who was behind the company’s foray into standup comedy and original documentaries, Netflix confirmed. Nishimura had worked on some of Netflix’s most popular titles, including “Making a Murderer,” “Power of the Dog” and “Tiger King.”
Ian Bricke, who served as the vice president of Independent Original Film at Netflix, will also be leaving. Bricke played a big part of Netflix’s dominance in the rom-com space, as he spearheaded notable titles like “The Kissing Booth,” “Set It Up” and “To All the Boys I’ve Loved Before.”
“Lisa Nishimura joined Netflix in the DVD days, and as the company moved into streaming, she built our original documentary and stand-up comedy divisions from the ground up, and established Netflix as a powerhouse in both spaces,” Stuber said in an emailed statement. “Ian Bricke has been at the company for more than a decade, building and leading our independent film team, attracting filmmakers like Tamara Jenkins, Nicole Holofcener, and Mark and Jay Duplass. We thank them both for their contributions to making us a world-class film studio and wish them the best for the future.”
The handful of layoffs come after Netflix conducted a series of job cuts last year. In May 2022, the company laid off approximately 150 staffers. A month after that, the company laid off 300 more people, which represented 3% of its workforce at the time. Netflix then laid off another 30 employees in September who were part of its animation department.
On the editorial side, Netflix laid off 25 people on its editorial staff just five months after launching its in-house Tudum publication.
Earlier this year, Netflix boasted to shareholders it has successfully scaled its decade-long original programming initiative.
“Now that we are a decade into our original programming initiative and have successfully scaled it, we are past the most cash-intensive phase of this buildout,” the company wrote to shareholders. “As a result, we believe we will now be generating sustained, positive annual free cash flow going forward.”
Netflix is scheduled to report Q1 2023 results on April 18.

Netflix appears to be working to bring games to TV with the iPhone as a controller

Netflix restructures its film units, aiming to make fewer (but better) original movies by Aisha Malik originally published on TechCrunch
Netflix restructures its film units, aiming to make fewer (but better) original movies

Netflix founder Reed Hastings steps down as co-CEO

Netflix founder and co-CEO Reed Hastings announced Thursday that he would step down after more than two decades at the company.
While news of his departure comes as a shock, Hastings noted that Netflix has planned its next era of leadership “for many years” in the announcement, which was shared on the company’s blog.
In 2020, Netflix named Ted Sarandos, who has long led content efforts at the company, as co-CEO alongside Hastings. At the time, Netflix characterized the change as formalizing the way that the company was already operating.
Netflix will maintain the co-CEO structure in Hastings’ absence, promoting COO Greg Peters to the tandem role with Sarandos.
“It was a baptism by fire, given COVID and recent challenges within our business,” Hastings said of Sarandos and Peters taking the reins.
“But they’ve both managed incredibly well, ensuring Netflix continues to improve and developing a clear path to reaccelerate our revenue and earnings growth. So the board and I believe it’s the right time to complete my succession.”
Hastings will stay involved with the company as executive chairman of the board, following a precedent shared by other prominent major tech company founders, including Amazon’s Jeff Bezos and Microsoft’s Bill Gates.
The news came shortly before Netflix reported its fourth-quarter earnings. The company beat expectations in Q4, adding 7.7 million subscribers — well over the 4.5 million it anticipated. The company brought in $7.85 billion during the final quarter of 2022, extending its recent trend of slowing revenue growth.
Netflix credited the popularity of content it released in Q4 for the huge subscriber boost, including the “Addams Family” reboot “Wednesday,” the stand-alone “Knives Out” sequel “Glass Onion” and the royals documentary “Harry & Meghan.”
Like most of tech, Netflix’s stock price has fallen well short of previous pandemic highs over the last year, but the company did recover from its midyear lows of $180 a share, trading at $315 before its Q4 report hit late Thursday.
The company introduced an ad-supported subscription tier in November and Thursday’s report offered the first real glimpse into how that new product might shift the company’s fortunes now that streaming’s early pandemic boom times are over. In the report, Netflix called the launch of its lower-cost ad-supported tier a success for Q4 but noted that it had “much more still to do” around the new product.
At CES earlier this month, a Netflix ad executive noted the range of advertisers that the company has already attracted, describing that as a boon for consumers who are eager to offset their monthly costs with a Hulu-like ad-supported subscription.

Netflix adds 2.41M subscribers, soaring past expectations

 
Netflix founder Reed Hastings steps down as co-CEO by Taylor Hatmaker originally published on TechCrunch
Netflix founder Reed Hastings steps down as co-CEO

Despite challenges, Netflix says its ad tier is doing well

In November, Netflix unveiled its long-anticipated ad-supported tier which offers customers in select markets, including the U.S., the ability to offset the cost of a Netflix subscription by allowing their viewing to be interrupted with ad breaks. At the Consumer Electronics Show in Las Vegas, Netflix President of Worldwide Advertising, Jeremi Gorman, offered some initial insight into how the product has been performing as well as the streamer’s future plans.
During an interview at Variety’s Entertainment Summit at CES, the exec said the company has been happy with the debut selection of advertisers and their diversity.
“It’s really across the board,” said Gorman, of the variety of brands participating. “We’re seeing CPG companies, luxury companies, automotive companies…[and] retail. We’re seeing a broad swath.” This is also good for the consumer experience, she noted, as it means viewers won’t be bored by one car ad after another. “There’s a wide variety of advertising types, and I think we’ll continue to see that,” Gorman predicted.
The interview also touched on some of the early complaints and concerns about Netflix’s foray into ads.
Among them is the key pushback the company has been receiving over its high ad prices, asking for what one industry exec dubbed “Super Bowl CPMs.” Gorman, however, justified the pricing but admitted the market will ultimately dictate what sort of pricing Netflix will be able to get.
“From a supply-demand perspective, the premium CPMs are reflective of two things: one is that we just couldn’t take that many advertisers. We certainly didn’t want to disappoint anybody. Then secondarily, the premium content environment in which the ads run I think warrants a high CPM.”
Whether Netflix constitutes a “premium environment” is up for debate, of course. But Netflix seems to be adjusting its expectations.
“I think we’re certainly humble enough to very much understand we’re top of market, and in addition to that, the market will more or less dictate to us what are reasonable CPMs,” Gorman said.
Another concern about Netflix’s ad-supported service has to do with which content can include ads. As the streamer wasn’t set up as an ad-supported service to begin with, many of its content deals didn’t include AVOD rights (advertising video on demand). That means Netflix has limited ad inventory, and couldn’t even run ads against some of its own “Netflix Originals” if the deals didn’t include the proper rights.
Gorman addressed this as well, saying Netflix was actively working on the licensing issues.
“That’s progressing, as we speak, day by day. We’re renegotiating deals we made a long time ago,” she said, adding that the “vast majority” of content that people watch regularly is available in the ad tier surface. In the meantime, Netflix has about 85% to 95% of its content available on the ad tier, Gorman said.
Then there’s the real concern that, from a business perspective, offering a lower-cost tier has the potential to cannibalize Netflix’s existing subscriptions as customers drop to cheaper tiers at a quicker rate that’s not offset by growth in the ads tier. Gorman, though, downplayed those concerns saying Netflix customers historically have remained on the plan they’re currently on.
The exec, unfortunately, couldn’t speak to the uptake of the ads-supported product, as Netflix is poised to announce earnings, but said “we’re pleased with the growth we’re seeing.”
At present, Netflix’s ad tier is available in the U.S., the U.K., France, Germany, Spain, Italy, Australia, Japan, Korea, Brazil, Canada, and Mexico. The company has no immediate plans to expand, but longer-term would aim to target any larger ad market. In addition to ads, subscribers on the Basic with Ads plan have to deal with lower video quality (720p HD) and are limited to streaming from one device. They also can’t download content to their devices for offline viewing.
Going forward, Netflix aims to do a bit more than just running typical ads, including things like dynamic insertion of ads near moments that are relevant to marketers, single-show sponsorships, and more. It will also later allow marketers to target ads by age and gender.
Despite challenges, Netflix says its ad tier is doing well by Sarah Perez originally published on TechCrunch
Despite challenges, Netflix says its ad tier is doing well

Netflix branches out into fitness content with upcoming launch of Nike Training Club classes

Netflix is officially branching out into fitness content, as the company announced today that it’s going to start streaming Nike Training Club classes next week. The streaming service will release a total of 30 hours of exercise sessions in two separate batches. The programs, which include workouts for all fitness levels, will be available in multiple languages on all Netflix plans.
The first batch of fitness classes will launch on December 30, with the second batch releasing in 2023. A total of 45 episodes will be part of the first batch, which will include the following classes: Kickstart Fitness with the Basics, Two Weeks to a Stronger Core, Fall in Love with Vinyasa Yoga, HIIT & Strength with Tara, and Feel-Good Fitness. Once the classes are released, Netflix users will be able to search “Nike” to access them.
For those unfamiliar with the Nike Training Club app, it offers a range of options for people of all fitness levels, including strength training, yoga and high-intensity workouts led by Nike’s certified trainers. Nike Training Club can in some ways be compared to Apple Fitness+ or Peloton.
“It’s not always easy to motivate yourself to exercise, but the option to feel the burn and then directly transition into one of your favorite shows does have a certain appeal,” the company wrote in a blog post. “And now, that’s exactly what you can do.”
This latest move from Netflix marks yet another way that the streaming service is branching out from its core business of TV shows and series. Over the past year, we saw the company delve into the world of gaming with the launch of Netflix Games. Now we’re seeing another departure from its core business as the streaming service begins testing the waters with fitness content.
The timing of the release likely isn’t a coincidence either, given that people around the world will soon make working out their New Year’s resolution. Considering that Netflix already has a significant user base, the streaming service may be able to entice people into trying out fitness content directly on the platform that they already regularly visit.
It’s worth noting that the launch won’t mark Netflix’s first foray into health-related content, as the streaming service launched mindfulness and meditation content from Headspace last year.
Depending on how successful the launch is, Netflix may decide to add even more fitness content to its platform to compete with the likes of Apple Fitness+ and Peloton. Beyond that, the company may even decide to produce its own fitness content if it can get enough people to see it as a viable option when it comes to fitness.
Netflix branches out into fitness content with upcoming launch of Nike Training Club classes by Aisha Malik originally published on TechCrunch
Netflix branches out into fitness content with upcoming launch of Nike Training Club classes