Netflix is ramping up its efforts to get free viewers to pay and will begin charging accounts for sharing passwords early next year, creating a system that adds fees to your plan for “extra member” subaccounts when people outside your family use your membership.
The company did not specify the price of these new fees when it confirmed the plan on Tuesday. But the scheme is already being tested in several Latin American countries and charges a fee for each additional member worth roughly a quarter of the price of a “standard” Netflix plan.
If Netflix adheres to this practice, then each additional member’s subaccount in the US would cost about $3.50 to $4.
After years of being relatively lax about sharing passwords, Netflix began testing ways to pay for shared accounts after it faced its deepest subscriber losses ever earlier this year. In addition to password-sharing fees, Netflix also plans to launch cheaper ad-supported subscriptions next month.
Netflix’s dominance of streaming video — not to mention years of elusive subscriber growth — has prompted nearly all of Hollywood’s major media companies to pour billions of dollars into their streaming operations. These so-called streaming wars brought a wave of new services, including Apple TV Plus, Disney Plus, HBO Max, Peacock, and Paramount Plus, among others — a flood of streaming options that has complicated the number of services you need to use (and , often, pay) to watch your favorite shows and movies online.
Now, feeling the heat of the growing competition to keep your attention and your subscription account, Netflix is pursuing strategies it previously dismissed for years.
The password-sharing fee system that Netflix will roll out more widely appears to be modeled after a scheme it has tested in Chile, Costa Rica and Peru for about six months.
On Monday, Netflix said it was rolling out a profile transfer feature, which is a key component of password-sharing charges tested in Chile, Costa Rica and Peru. This feature allows a profile created on a shared Netflix account to transfer its viewing history and recommendations to a new, independent account. This new account can then be added to someone else’s Standard or Premium subscription plan.
In July, Netflix said it would test another method in Argentina, the Dominican Republic, El Salvador, Guatemala and Honduras. This test established an account’s primary residence as the “home” for the membership. Broadcasting to any additional households for more than two weeks would prompt the account to set up — and pay for — additional “homes,” with a limit on how many additional homes you can add depending on how much you’re already paying for Netflix. Netflix seems to be eschewing this model in favor of another model it tested.
