Netflix is expanding its password-sharing crackdown to four new countries, according to a blog post released on Wednesday, as the company tries to convert more free riders into paying subscribers.
The company will start asking users in Canada, New Zealand, Spain, and Portugal to pay extra if they want to share an account with someone living outside their home. The cost of adding a new “subaccount” differs per country: Portuguese customers only have to pay €3.99 (or $4.28) a month, while Spanish customers across the border have to pay €5.99 (or $6.43) a month.
Subscribers to Netflix’s Standard and Premium plans can add one and two subaccounts respectively. Those on the company’s Basic plan cannot add a new member.
The new fees could add significantly to the cost of a Netflix account in these countries. For example, a Standard plan in Canada costs $16.49 Canadian (or $12.28) a month. Adding one extra member will cost an additional $7.99 Canadian (or $5.49), bumping up the total cost by almost 50%.
According to its support page, Netflix defines a household as “people who live in the same location with the account owner.”
In its post, Netflix promised that users could stream movies and shows even while traveling, though did not provide details.
Why is Netflix stopping password sharing?
The company suggests that over 100 million households engaged in some form of account sharing. In a letter to shareholders last month, the company claimed that watchers free-riding off someone else’s account “undermines our long-term ability to invest in and improve Netflix.”
Netflix has been testing different ways to discourage password sharing in some of its Latin American markets since last March. The model proposed on Wednesday was first tested in Peru, Chile, and Costa Rica.
The company reported a loss of 1.2 million paying subscribers in the first half of 2022, which prompted it to accelerate the crackdown on account sharing. Netflix also launched a new ad-supported subscription tier at a lower price point last November.
The company’s subscriber numbers have since recovered, with Netflix adding 10.1 million subscribers in the second half of 2022.
In its shareholder letter, Netflix said it would roll out its anti-sharing measures more broadly in the first quarter of 2023. The company warned that these new measures could affect “near-term member growth,” but claimed that it would improve overall revenue as more users who once got accounts for free became paying customers.
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