Netflix is ramping up its efforts to get free-to-download viewers to pay: Starting early next year, it will start charging accounts for sharing a password and introducing a system that increases fees for “extra member” subaccounts when people outside the same household use the membership.
The company did not specify the prices of these new payments when it confirmed the plan last week. But this change is already being tested in a few Latin American countries, where Netflix charges each additional member a fee equal to about a quarter of the price of the standard package.
If Netflix follows this policy, each additional member’s sub-account in the US would cost around $3.50-$4 – possibly as much as $4.43 based on Chile’s fee level.
And if it lives up to the standards of these account tests, Netflix will likely also make these “extra membership fees” available for just its $15.50 monthly subscription and $20 monthly subscription, both of which allow more than one simultaneous stream.
Netflix has not offered an option for these “additional membership fees” in its basic plans in tests. Netflix’s $10 a month Basic tier and a new plan coming next month — $7 a month Basic with Ads — limit viewing to one simultaneous stream, making account sharing functionally difficult.
Netflix did not detail how it will enforce the sharing of the free password once payments are rolled out widely.
Netflix password sharing has ended
After years of being relatively lax about password sharing, Netflix began testing ways to “commercialize account sharing” after posting its deepest subscriber losses ever earlier this year. In addition to password sharing fees, Netflix plans to release cheaper orders supported by advertisements next month.
Netflix’s dominance in streaming video — not to mention years of skyrocketing subscriber growth — forced nearly every major media company in Hollywood to spend billions of dollars on their own streaming operations. These so-called streaming wars brought with them a host of new services, including Disney Plus, HBO Max, Peacock, Paramount Plus and Apple TV Plus. This flood of streaming options complicates the number of services you have to use (and often pay for) to watch your favorite shows and movies online.
Now, as the competition heats up to keep your attention and your subscriptions, Netflix is pursuing strategies it had abandoned for years.
The password-sharing payment system introduced by Netflix appears to be modeled after a plan it has been testing in Chile, Costa Rica and Peru for about six months.
A day before Netflix announced its plans to roll out these account sharing fees more widely, Netflix anticipated the announcement by launching a profile migration feature that is a key part of password sharing payments being tested in Chile, Costa Rica and Peru. With this feature, a profile created on a shared Netflix account transfers 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 as an additional member, or it can join its own membership.
In July, Netflix announced that it was testing a different method in Argentina, the Dominican Republic, El Salvador, Guatemala and Honduras. This test confirmed the account’s primary residence membership as “home”. If the service detected streaming in other households for more than two weeks, it would prompt the account to set up — and pay for — more “homes,” limiting how many additional homes you can add based on how much you’re already paying for Netflix. Netflix seems to be eschewing this model in favor of another model they are testing.
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