Netflix has recently implemented its new password-sharing policy in several regions around the world. In February, the policy was launched in Canada and Spain, after being tested in Latin America the previous year. This move has caused concern among subscribers in the United States, as password-sharing fees are set to roll out in the second quarter of the year, likely by the end of June.
Netflix subscribers who share their passwords with people outside of their physical households will be required to pay for each subaccount. Although the company has not yet announced how much it will charge for password sharing in the US, in countries where paid sharing has already been implemented, only subscribers with Standard or Premium plans can add extra members, capped at two per account. Other users who live outside of a paying member’s household will be blocked from the platform and prompted to open their own accounts with the option to transfer their profiles.
Despite the backlash from some customers, the new policy has proved successful in Canada, where Netflix claims that its paid subscriber base is larger than it was before the launch of paid sharing. The company hopes to achieve similar results in the US. However, during its quarterly investors’ call on Tuesday, Netflix co-CEO Greg Peters revealed that the company is still considering how much to charge for password sharing.
Netflix has tested different pricing models for the rollouts in different countries, indicating that the company is considering what would be the optimal pricing for password sharing in more affluent countries. When the policy was announced in February, Netflix required members to set a primary location for their accounts. Subscribers will still be able to watch videos on demand while traveling. In Canada, the fee for each extra user is CA$8 per month, while in Spain it is 6 euros, in Portugal it’s 4 euros, and in New Zealand it’s NZ$8. Based on these amounts, it is expected that Netflix will charge US subscribers between $7 and $8 per subaccount.
Netflix’s new policy has been met with criticism from some customers, who have threatened to cancel their accounts once the new fees are implemented. Others have expressed concerns about their family members, including college kids, parents, and military personnel, being kicked off their subscriptions.
In an effort to offset the negative impact of the new policy, Netflix has lowered its subscription prices in over 100 markets, including Asia, Africa, Europe, and the Middle East. Some countries, such as Venezuela, have seen reductions of up to 50%. In addition, Netflix has launched a new, lower-priced subscription plan called Basic with Ads, which costs $7 per month and offers one stream. The company plans to upgrade the plan to include better video quality and more streams to make it more attractive to new and existing customers.
Despite facing some challenges, Netflix has continued to grow its viewership and subscriber base thanks to the release of popular TV shows such as Wednesday, Outer Banks season 3, and Ginny & Georgia season 2. With the new password-sharing policy and other monetization efforts, it will be interesting to see how Netflix continues to evolve and adapt to the changing landscape of the streaming industry.