Netflix is expanding account sharing rules to four countries
Netflix is expanding its crackdown on password sharing to four new countries as the company seeks to convert more free riders into paying subscribers, according to a blog post published Wednesday.
The company will ask users in Canada, New Zealand, Spain and Portugal to pay a surcharge if they want to share an account with someone who lives outside of their home. The cost of adding a new “sub-account” varies from country to country: Portuguese customers only have to pay €3.99 (or $4.28) per month, while Spanish customers across the border pay €5.99 (or 6, $43) per month.
Netflix Standard and Premium plan subscribers can add one and two sub-accounts respectively. Those on the company’s Basic plans cannot add a new member.
The new fees could significantly increase the cost of a Netflix account in these countries. For example, a standard plan in Canada costs 16.49 Canadian dollars (or $12.28) per month. Adding an additional member costs an additional CA$7.99 (or $5.49), increasing the total cost by almost 50%.
According to its support page, Netflix defines a household as “people living in the same place as the account holder”.
In its post, Netflix promised users would be able to stream movies and shows while traveling, but didn’t provide any details.
Why is Netflix stopping sharing passwords?
The company estimates that over 100 million households share some form of account. In a letter to shareholders last month, the company claimed that observers who stand out from other people’s accounts “undermine our long-term ability to invest in and improve Netflix.”
Netflix has been testing various methods to stop password sharing in some of its Latin American markets since last March. The model proposed on Wednesday was first tested in Peru, Chile and Costa Rica.
The company reported a loss of 1.2 million paying subscribers in the first half of 2022, prompting it to accelerate its crackdown on account sharing. Netflix also introduced a new ad-supported subscription tier at a lower price last November.
The company’s subscriber numbers have since recovered, with Netflix adding 10.1 million subscribers in the second half of 2022.
In its letter to shareholders, Netflix said it would roll out its anti-sharing measures more broadly in the first quarter of 2023. The company warned that these new measures could hurt “short-term membership growth” in the short term, but claimed it would improve overall revenue as more users who were once given free accounts become paying customers.
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