Netflix is cracking down on account sharing—it will soon charge for members outside of a household to use the same account.
Key Details
- Netflix announced it expects to roll out password-sharing charges in the first quarter.
- By March, Netflix will likely start charging accounts sharing the same password outside of one given household.
- The change comes after Netflix lost a large number of subscribers and the company said account sharing affected over 100 million households.
- Paid sharing was tested in Costa Rica, Chile, and Peru—where Netflix charged $2 to $3 to add a member outside of the primary household to an account.
Why it’s news
Netflix password sharing could soon come to an end as the company announced a new change that could start charging accounts sharing passwords outside of the primary household.
Netflix announced in April a large subscriber loss marking the biggest drop in more than a decade, costing the company billions and leading to company-wide layoffs. After the loss, Netflix began cracking down on policies and hinted at charging for password sharing, which is not becoming reality.
This week Netflix sent a letter to shareholders saying it is rolling out paid account sharing more broadly. By March, the company may start charging for every account using the same password outside a given household.
The company said account sharing affected over 100 million households, which “undermines our long-term ability to invest in and improve Netflix.”
Paid sharing was tested in Costa Rica, Chile, and Peru, where Netflix charged $2 to $3 to add a member outside of the primary household to an account. Netflix said the trial in Latin America caused many people to unsubscribe, but overall revenue is expected to improve as people who borrowed accounts begin subscribing themselves.
The exact launch date for the change has not been specified but is expected around March.
