Netflix Finally Lowers The Boom On U.S. Password Sharers, Initiates $8-Per-Month Fee

• by Karlene Lukovitz  @KLmarketdaily, 9 hours ago

A year after signaling that it would eventually crack down on password sharing in the U.S., as well as its other global markets, Netflix has launched the initiative domestically, with a $7.99 monthly fee for each user outside of an account’s main household location.

The world’s largest streaming service, which estimated that some 100 million households around the world were engaging in password sharing, on Tuesday sent an email to U.S. customers whose accounts are being shared by “someone who doesn’t live with you.”  

If a main account holder is unwilling to pay the additional $7.99 per month, users outside of their  households can start their own paid accounts and transfer their profiles.

The third, unstated option for current password sharers: Simply stop using Netflix.

Extra members can be added for subscribers to the $15.49 Standard plan and the $19.99 Premium plan, but not to Netflix's $6.99 ad-supported plan or the $9.99 no-ads Basic plan. 

“Starting today, we will be sending this email to members who are sharing Netflix outside their household in the United States,” the streamer wrote. “A Netflix account is for use by one household…”

Netflix also rolled out its password sharing ban in other major markets, including the UK, where the monthly fee for adding a user is £4.99 and €5.76.

In an effort to soften the blow, Netflix is emphasizing that everyone living in the account holder’s household can still access the service “on the go” and “on holiday,” as well as at home, and promoting its ongoing commitment to delivering a wealth of quality content.

“We recognize that our members have many entertainment choices,” states the email. “It’s why we continue to invest heavily in a wide variety of new films and TV shows — so whatever your taste, mood or language and whoever you’re watching with, there’s always something satisfying to watch on Netflix.”

The message also mentions two “new features,” both of which are needed to facilitate the transition from free sharing to paid accounts: the profile transfer function, and a “manage access and devices” area where account holders can view details about signed-in devices that have been active on the account in the last 90 days and sign out those devices, if desired.

Reflecting the streaming industry's shift from driving subscriber numbers at all costs to making a profit, Netflix launched its paid sharing program in Latin America last year and started to roll it out in Canada, New Zealand and Portugal, as well as Spain, in February. But it delayed the rollout to the U.S., UK and the rest of its markets from this year’s first quarter to the second quarter, saying it wanted to incorporate more learnings from its earlier experiences before pulling the trigger.

Research firm Kantar has estimated that the password sharing crackdown cost Netflix 1 million subscribers in Spain in Q1 2023.

While Netflix has acknowledged that it had seen a “cancel reaction” in all markets where it has implemented the program, it has also insisted that subscribers will return, and that overall numbers will eventually rebound. In Canada, paid membership is now larger than it was prior to the program’s launch, according to the company.  

“Based on what we have seen in markets where Netflix has rolled out its plan so far there hasn’t been a huge amount of consternation among the subscriber base,” said Richard Broughton, an analyst at Ampere. “Netflix has had plenty of time to test this. It is not too uneconomical to upgrade to add more people, we don’t see large numbers of people furious about not being able to access Netflix for free."