After years of apparently turning a blind eye to password sharing, Netflix Inc. is making moves to limit users sharing their passwords. The streaming giant issued a press release stating that subscribers will now pay to share Netflix outside their households.
According to Chengyi Long, Director of Product Innovation, the sharing of accounts between households is impacting Netflix’s ability to invest in great new TV and films.
A few weeks after the streaming giant raised the price of its monthly subscriptions in the U.S., the company said it is testing a new feature that will charge customers an extra fee for the ability to share accounts. Over the next few weeks, the new option will be tested over the next few weeks in Chile, Costa Rica and Peru before it introduces changes in other countries.
Existing subscribers will be able to add sub accounts for up to two people they don’t live with at an additional cost. In Costa Rica, the feature will cost $2.99 a month, with users in Chile and Peru being charged the local equivalent. Members on the Standard and Premium plans will be able to add sub accounts for up to two people they don’t live with – each with their own profile, personalized recommendations, login and password.
Transfer of a profile to a new account. Members on the Basic, Standard, and Premium plans can enable people who share their account to transfer profile information either to a new account or an Extra Member sub account – keeping the viewing history, My List, and personalized recommendations.
Netflix is also facing increased competition among streaming platforms and rising programming costs. The company is spending more on content to attract and keep subscribers as viewers have more content to choose from thanks to a crowded field.
In January, the company raised the price for its monthly plans, the first such increase from the streaming platform since 2020. The monthly cost for its basic plan for U.S. customers rose $1 to $9.99, while its standard plan increased to $15.49 from $13.99 and the premium plan to $19.99 from $17.99
Netflix has previously experimented with tightening account security. In March 2021, the company started prompting some of its users to verify their identity through a text message.
According to WSJ, Netflix’s rivals, including AT&T Inc.’s HBO Max and Walt Disney Co.’s Disney+, often email their customers when they notice multiple logins from various locations, according to people familiar with the companies’ policies. The emails usually say that the service wants to ensure the user’s account wasn’t hacked, the people said. But they also serve as a gentle reminder to customers that companies know when more than one person is using the account, industry experts said.
In January, the company said it expected to add a much smaller number of subscribers in the current quarter than it did a year ago as it adjusts to growing competition and lasting disruptions from the pandemic. The company forecast an increase of 2.5 million subscribers in the current quarter, compared with four million a year earlier. It also slightly missed its subscriber estimate for the fourth quarter of 2021, adding 8.3 million subscribers instead of the projected 8.5 million