Netflix is moving forward with its crackdown on password sharing in the United States. The streaming giant said US subscribers will have to pay $8 to add a user to their account. This is how repression works in the world. Something is loading.
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The long-awaited crackdown on Netflix password sharing has finally arrived in the United States.
On Tuesday, the streaming giant announced plans to crack down on password sharing by charging US subscribers $8 to add another user to their account. Charges apply only to someone living outside the account holder’s household.
Netflix first hinted at a crackdown on password sharing in July after suffering its first loss of subscribers in more than a decade during the first quarter of 2022.
This decision was unpopular with Netflix subscribers around the world.
Even before the plans were implemented, the proposed ban drew strong reactions from some customers, many of whom threatened to cancel their accounts when the rules were introduced.
The policy has already been rolled out in several countries, but research indicates that dozens of customers have already canceled a frenzy.
Citing research from Kantar, reported that Netflix lost more than a million users in Spain, where password-sharing rules were enforced in early February, in the first three months of 2023. Q1 subscriptions tripled from the prior period, according to Kantar research.
The reaction is not entirely unexpected. During an earnings call in January, Netflix co-CEO Greg Peters said the company expected to see “a slight backlash” to the policy. In its April 18 first-quarter earnings release, Netflix said the company expects the drop to be temporary before “borrowers” start opening their own accounts.
How it works
Netflix said it can detect when passwords are shared outside of a household, which it defines as people who live in the same place as the account owner.
The company previously said it uses a combination of IP addresses and device identifiers to determine if an account is being used in the correct location. If users want to share their account with someone outside their household, they can purchase an “additional member” and add them to the account, according to the Netflix Help Center. This feature is only available in certain countries.
Paid sharing was initially tested in Costa Rica, Chile, and Peru, where it costs the equivalent of around $2-3 to add an additional member account.
This was later extended to include New Zealand, Canada, Spain and Portugal.
Additional member pricing varies by country. In New Zealand, the service costs NZ$7.99 ($5.09) per month, in Canada it costs C$7.99 ($5.96) per month. In Spain, the service costs 5.99 euros ($6.45) and in Portugal it’s 3.99 euros ($4.30).
The company compared Canada’s reaction to the new policy with what it hopes to achieve in the United States.
“In Canada, which we believe is a strong predictor for the United States, our paid member base is now larger than before the launch of paid sharing and revenue growth 4 has accelerated and is now growing more faster than in the United States,” the company said. in a letter to shareholders following the release of its first quarter results.
Netflix has been testing other rules aimed at eradicating password sharing, including temporary passcodes for travel, Insider previously reported.