Netflix fights password-sharing with test of $3 “Extra Member” fee

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Netflix will soon charge an extra fee for sharing accounts with people in other households. This is the company’s latest attempt to reduce the password-sharing that has been common among Netflix users for years. The fee will roll out in Chile, Costa Rica, and Peru “over the next few weeks” and potentially go worldwide at a later date.

“Members on our Standard and Premium plans will be able to add sub accounts for up to two people they don’t live with—each with their own profile, personalized recommendations, login and password—at a lower price: 2,380 CLP in Chile, 2.99 USD in Costa Rica, and 7.9 PEN in Peru,” Netflix said in an announcement yesterday. Based on current conversion rates, 2,380 CLP is about $2.98 USD and 7.9 PEN is about $2.12 USD.

The new fee will be paired with the ability for users to transfer profile information (including their viewing history and watchlist) to a new account or an Extra Member account. After rolling out the fee and profile transfers in Chile, Costa Rica, and Peru, Netflix will “be working to understand the utility of these two features for members in these three countries before making changes anywhere else in the world,” the company said.

According to Variety, Netflix “will notify members [in those three countries] who share their account outside their household about the new options. A member may be prompted to verify their account only if a device outside of their household logs in to the account; Netflix may then ask the user to verify the login from the device by sending a verification code.”

About a year ago, Netflix started showing warnings to some users who borrow login information. The warnings said, “If you don’t live with the owner of this account, you need your own account to keep watching.”

In yesterday’s announcement, Netflix said there has been “confusion about when and how Netflix can be shared. As a result, accounts are being shared between households—impacting our ability to invest in great new TV and films for our members.” Netflix’s terms of service say that accounts “may not be shared with individuals beyond your household.”

“We recognize that people have many entertainment choices, so we want to ensure any new features are flexible and useful for members, whose subscriptions fund all our great TV and films,” Netflix said.

Netflix reported $30 billion in revenue and $6.2 billion in operating income in full-year 2021, representing year-over-year growth of 19 percent and 35 percent, respectively. Netflix added 8.3 million paid memberships in Q4 2021, bringing the total to 222 million in over 190 countries. Prices for streaming plans in the US range from $9.99 to $19.99 per month.

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