Netflix to Charge Password Sharers

Netflix is testing ways to charge Latin American users who share their passwords with someone residing in a separate household. 

In a statement posted to its website Wednesday, the streaming giant said: “We’ve always made it easy for people who live together to share their Netflix account, with features like separate profiles and multiple streams in our Standard and Premium plans. 

“While these have been hugely popular, they have also created some confusion about when and how Netflix can be shared. As a result, accounts are being shared between households – impacting our ability to invest in great new TV and films for our members.”

In the final quarter of 2021, Netflix reported a net gain of 8.28 million subscribers and Q4 revenue of $7.71bn (up 16%), in line with Wall Street expectations. However, its share price dropped in January as it grapples with a slower-growing customer base.

The company said that over the next few weeks, it would start allowing users in Chile, Costa Rica and Peru on Standard and Premium plans to add sub-accounts for up to two people they don’t live with.

Members on Basic, Standard and Premium plans will be able to let people sharing their account transfer profile information to a new account or an Extra Member sub-account and keep the viewing history.

“We’ll be working to understand the utility of these two features for members in these three countries before making changes anywhere else in the world,” said Netflix

The tax on password sharing comes after Netflix raised the monthly price of most of its subscription plans in the US and Canada. Netflix’s raised the price of its Standard plan by $1.50, to $15.49 per month, and put its Premium plan up to $2, from $17.99 to $19.99 per month, for US customers.

According to a December 2021 Kagan Consumer Insights survey of US adults, the percentage of Netflix users sharing a login has declined over the last three years and was barely more than 10%. 

In 2019, 13% of users were sharing a login. In 2020 that figure fell to 12%, and in 2021 the percentage dropped again to just 11%.