Netflix to charge customers extra for sharing their account

Netflix is asking customers in five Latin American countries to pay a fee if they want to use their account in an additional home – a test the company hopes will generate additional revenue by getting customers to pay to share their Netflix account.

In a post on Monday (9 July), the company said over the last 15 years, it has worked hard to build a streaming service that’s easy to use, including for people who travel or live together.

“It’s great that our members love Netflix movies and TV shows so much they want to share them more broadly. But today’s widespread account sharing between households undermines our long-term ability to invest in and improve our service.”

“So we’ve been carefully exploring different ways for people who want to share their account to pay a bit more.” 

In March 2022, the streaming service launched an ‘add extra member’ feature in Chile, Costa Rica, and Peru. From next month, it will launch an alternative ‘add a home’ feature in Argentina, the Dominican Republic, El Salvador, Guatemala, and Honduras.

Netflix said the ‘add a home’ feature would work as follows: 

• One home per account: Each Netflix account – whatever the plan – will include one home where customers can use Netflix on any of their devices. 

• Buy additional homes: To use a Netflix account in additional homes, customers will be asked to pay an extra $2.99 per month per home. Members on the Basic plan can add one extra home, Standard up to two extra, and Premium up to three extra. 

• Travel included: Customers can watch while outside the home on their tablet, laptop or mobile.

• New manage homes feature: Customers will soon be able to control where their account is being used – and remove homes at any time – from the account settings page.

Netflix said that more than 100 million households are using accounts paid for by other people, and blamed password sharing as one of the primary reasons for its floundering subscriber growth.

The company lost 200,000 customers in the first quarter of the year, and forecast it would lose 2 million more in the second. Its share price has dropped more than 65% this year as investors fret that the streaming business is in trouble.

Password sharing has been particularly high in Latin America, where Netflix is conducting its first two tests to see if people will pay for access. The company is trying to limit sharing without punishing people who already pay for Netflix or alienating viewers.

The effort has been portrayed at times as a crackdown, which has caused some customers to worry they will lose access to their account.

The company is testing ways to charge extra if people want to use the same Netflix account. In its first effort, the company has asked customers in Chile, Costa Rica and Peru to pay to an additional fee to add a member to an account. That new member sets up a sub-account with their own email address, gets their own stream and can use Netflix at the same time as the primary account holder within the limits of their plan.

A basic plan allows customers to watch on one device at a time. The pricier standard plan allows for two separate devices, and the premium plan allows four.

This latest test is targeted at customers who are using the same account in multiple households. If they use an account somewhere other than one of their paying households for more than two weeks, they will receive an in-app notification asking them to either add a household or change their primary household to the new location.

Customers can manage their homes, adding or deleting them as they choose. Adding households doesn’t increase the number of people who can watch Netflix at the same time.

With further reporting by Bloomberg.

Read: Netflix’s plan to fix its subscription crisis starts in Asia