Despite facing immediate backlash when it announced it was rolling out a pilot password-sharing program in March, Netflix said this week that it’s moving forward with its plan to “monetize account sharing” by making subscribers pay an additional fee for sharing their account with users outside their household. The company said it’s going to give users who are borrowing someone else’s account the ability to transfer their existing profile information—including viewing history and personalized recommendations—to their own account. Subscribers who want to keep sharing with family or friends outside of their household will also have the ability to pay for “sub-accounts” for extra members.
Netflix began experimenting with charging for password sharing in Costa Rica, Chile, and Peru earlier this year. Subscribers in those three countries were able to add up to two extra members to their accounts for an additional $2.99, 2,380 Chilean pesos, and 7.9 Peruvian sol, respectively, each per month. Netflix has not yet announced how much it is planning to charge for this service in other countries.
Netflix said in its April shareholder letter that, after losing subscribers for the first time in over a decade in the first quarter of 2022, cracking down on password sharing would be a “big opportunity” for revenue growth going forward. Lost revenue from password-sharing has affected the company’s ability to “invest in great new TV and films,” it said in March.
Then, in its third-quarter earnings report, Netflix said that it added 2.4 million subscribers, higher than the 1 million the company had projected the previous quarter. It also forecast a gain of 4.5 million subscribers for the fourth quarter as it gears up to roll out its new ad-supported, lower-priced subscription tier in early November. Netflix said it expects its profile-transfer option to be “especially popular” among password-sharers in the 12 countries where its new ad tier will initially be available.
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