Netflix implemented its new password-sharing policy in February in four regions, including Canada and Spain, after testing the extra fees in Latin America last year. Now, for many subscribers in the US, it’s the moment they have not been waiting for. Password-sharing fees are officially rolling out in the second quarter, which would be by the end of June.
The streaming service announced the move in a letter to shareholders Tuesday but didn’t say how much it will charge in the US for password sharing. Netflix subscribers who are sharing their passwords with people outside their physical households will have to pay for each subaccount. In countries where paid sharing has already rolled out, only subscribers with Standard or Premium plans can add extra members, which is capped at two per account. Otherwise, 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.
In Canada, where account-sharing fees have rolled out, Netflix says its paid subscriber base is “larger than prior to the launch of paid sharing” and is growing. The company believes it will achieve similar results in the US. However, during its quarterly investors’ call on Tuesday, Netflix co-CEO Greg Peters said the streamer is still considering how much to charge.
“We tested different pricing in these rollouts than what we tested in Latin America, and that gives you a sense of how we’re thinking about what is optimal pricing — especially in more affluent countries,” Peters said.
When Netflix outlined its plans for the password-sharing crackdown in February, the company required members to set a primary location for their accounts. Subscribers will still have the ability to watch videos on demand while traveling. Customers in Canada must pay CA$8 per month for each extra user. In Spain, the fee is 6 euros, for Portugal it’s 4 euros, and in New Zealand it’s NZ$8. Based on those amounts, it’s expected Netflix will charge US subscribers between $7 and $8 per subaccount.
The streaming giant has drawn backlash for the policy, which comes after raising the prices for its most popular subscription tiers in 2022. Some customers threatened to cancel their accounts once the new fees roll out, and others expressed concerns about their college kids, parents and family members in the military being kicked off their subscriptions.
In late February, Netflix slashed the prices of its subscriptions in over 100 markets, including Latin America, Asia, Africa, Europe and the Middle East. Some countries, like Venezuela, saw a reduction of as much as 50%.
Since experiencing a drop in subscriber numbers in the first quarter of 2022, Netflix has focused on new ways to monetize its service. In November, the company launched Basic with Ads, an ad-supported tier that costs $7 per month and offers one stream. Netflix said it’s upgrading the plan to include better video quality and more streams to make it more attractive to new and existing customers. Along with the new, lower-priced subscription plan, the company credits the release of TV shows like Wednesday, Outer Banks season 3 and Ginny & Georgia season 2 for helping to bolster viewership and subscriber numbers for early 2023.
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