Netflix started to charge a US$7.99 fee to US-based users who share their accounts with people who don't live with them as the platform begins cracking down on password sharing. "Your Netflix account is for you and the people you live with your household,” the company said in an email to U.S. customers. "To share Netflix with someone outside of your household, you can transfer a profile to a new membership that someone else pays for, or you can buy an extra member for $7.99/month in addition the cost of the main subscription."
Existing members were notified of the update, intially planned to roll out during the first quarter of this year, earlier this week. The strategy is introduced in the US after rolling out in New Zealand, Canada, Portugal and Spain. Users in these countries are now required to set a primary location for their accounts, and establish two sub accounts for those who intend to use the subscription in another location. Though US households won't have to abide by the same rules, users will have two options of either transferring a profile or paying a fee for an extra member.
According to a recent report, approximately 43% of more than 100 million households share accounts, which has affected the platform's ability to invest in new content. So far, the streamer has reported positive results as a result of the initiative, including the addition of 1.75 million customers during this quarter. Despite seeing a rise in cancellations in Latin America upon sharing news of the fees, the platform has noted a pattern of password borrowers reactivating their own accounts and adding exisitng members as "extra members" of the account, which is projected to result in higher revenues.
In addition to the new rules surrounding password sharing, Netflix will now offer a more cost-effective, ad-supported subscription as it aims for a spike in revenue. Netflix's catalog of subcriptions now include the Standard ad-supported, which supports 2 devices at a time for $6.99/month, the Basic package supporting 1 device at a time for$9.99/month, the Standard package offering two devices at a time for $15.49/month, and the Premium supporting 4 devices at a time for $19.99/month. "We recognize that our members have many entertainment choices. 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 platform stated in a recent press release.