Netflix is ​​still trying to figure out how to charge for password sharing

Netflix is ​​still trying to figure out how to charge for password sharing

There was a time when Netflix had the entire pie in terms of television and movie-streaming market share, but compelling offers from companies like Amazon, Disney, Apple and Warner Bros. Discovery have forced the service to rethink its business plan. The company continues to experiment with ways to crack down on password sharing in its Latin American markets, Bloomberg reported.

Limited use is OK

Netflix will charge users in Argentina, El Salvador, Guatemala, Honduras, and the Dominican Republic an additional fee if they want to use their account outside of their primary residence for more than two weeks. This is to prevent long-term password sharing while still making allowances for things like vacations.

In these areas, you’ll have a primary residence where you can access Netflix across all your devices. If you want to use your Netflix account at a secondary residence, Netflix asks you to pay the equivalent of $1.70 in Argentina and $2.99 ​​in other countries. Depending on your plan you can add more additional homes; One in Basic plan, two in Standard plan and three in Premium Bloomberg says it won’t affect users of smartphones, tablets or laptops, but the main issue still exists: How does Netflix decide what constitutes a family?

A ‘household?’

Netflix began testing it in March, focusing on Chile, Peru and Costa Rica. For that test, Netflix allowed users to add “subaccounts” to an existing account for the equivalent of about $2-3 USD. Rest of the World (via The Verge) noted in May, however, that consumers were unsure of Netflix’s definition of a family (though other users found ways around the prompt entirely).

For example, if mobile devices aren’t affected, is Netflix making that decision based on whether the device is directly connected to the carrier, or does that also include WiFi usage? If someone takes their laptop between two houses, are those two families? If being on a mobile device is an automatic pass, how does Netflix determine you’re on a mobile device?

100 million households are using shared passwords

It’s a big business. Bloomberg notes that more than 100 million households are using accounts paid for by other people, and points to password sharing as the reason for its slow growth and the first loss of customers in nearly a decade in the first quarter of 2022. The company’s share price has fallen by nearly 70% this year as a result. The company said password sharing has been particularly high in Latin America, so the initiative is being tested there first.

The company is trying to strike a balance between making those password sharers cough up at least a few dollars without alienating paying users at the same time. The company hopes to ease the transition with an account transfer tool that lets you transfer your user profile–recommendations, viewing history, and My List–to one of those sub-accounts or to a new account entirely.

While some users will certainly embrace this model, others will choose to ditch the service to pay more. To offer another possible avenue, Netflix is ​​exploring an ad-supported layer of streaming and recently partnered with Microsoft to make those ads happen. At this point, Netflix hasn’t announced any specific plans to roll out its password-sharing restrictions to other regions, but it’s almost certain once the streamer figures out the tricks.

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