How Netflix's Password Sharing Crackdown Will Work
In case you missed it, Netflix stock prices took a nosedive last week. After losing subscribers for the first time in 10 years, Netflix has been announcing its plans to revive its subscriber growth and revenues. One of the first things to go: password sharing. More than 100 million households share passwords, and they might soon face the consequence of Netflix’s password sharing crackdown.
For users who share passwords with people who do not live in their homes, Netflix could likely roll out a new feature that would require extra payments for every new user sharing the password. This extra payment system is already being tested in Peru, Costa Rice, and Chile, where users and “sub accounts” with different addresses must cough up an average of $2.5 per person. The fees are currently $2.13 per head per month in Peru, $2.99 in Costa Rice, and $2.92 in Chile.
That’s not to say Netflix is discouraging password sharing—it just wants to make sure it gets a cut.
“We’re not trying to shut down that sharing, but we’re going to ask you to pay a bit more to be able to share with her and so that she gets the benefit and the value of the service, but we also get the revenue associated with that viewing,” said Netflix COO Greg Peters.
There’s no deadline yet for this new feature, but according to Peters, it could be rolled out globally in about a year.
“It will take a while to work this out and to get that balance right,” he explained. “And so just to set your expectations, my belief is that we’re going to go through a year or so of iterating and then deploying all of that so that we get that solution globally launched.”
Netflix’s password sharing crackdown will set a precedent for streamers, and its top competitors like HBO Max/Go, Disney+, and Amazon Prime will likely follow suit if the crackdown proves beneficial to revenues.
If you happen to receive an email about your password sharing habits, then you know Netflix is watching.
