In April, Netflix attributed the loss of more than 200,000 subscribers in the previous quarter to users who shared their credentials with friends and relatives. The network currently has more than 100 million users that do not have a Netflix membership, according to the business.
In a memo to staff, Netflix stated that company intended to crack down on password sharing; at least in a few regions, this is already a reality. Netflix is currently experimenting with charging for password sharing in five different Latin American nations: Argentina, El Salvador, Guatemala, Honduras, and the Dominican Republic, as Bloomberg reported on Monday.
Customers in these nations must now pay an additional cost if they use an account for more than two weeks away from their permanent location. Netflix says users won’t have to pay an additional cost to watch Netflix on cellphones, tablets, or computers, so for the time being, the system uses TVs to identify multiple logins in different locations.
Password sharing for Netflix accounts now carries a $2.99 fine (depending on local currency). The extensive account sharing amongst households, according to one of the company’s directors, “undermines our long-term ability to invest in and improve our service.”
Netflix decided to launch the new “feature” in Latin America first since password sharing has been “especially rampant” in that region.
Netflix has already been trying a similar technique to stop password sharing in Chile, Costa Rica, and Peru, but this method costs consumers extra money to add a new member to a Netflix account using individual credentials connected to the parent account.
Netflix appears to assume that password sharing is the primary cause of their declining subscriber and revenue numbers, but there are actually a lot of other factors at play. The cost is unquestionably one of them.
In the US, Netflix’s entry-level package is $9.99 per month and only supports 480p streaming to a single device. Currently, the 4K subscription with support for up to four devices running at once costs $19.99 per month, while the HD plan is $15.49.
However, because to their lower prices, Netflix rivals including Amazon Prime Video, Apple TV+, HBO Max, and Disney+ have been expanding recently. With 4K content and compatibility for up to five additional users on the same account, Apple TV+ costs $4.99 per month in the United States. With compatibility for multiple devices and 4K video, Disney+ is only $7.99 per month.
When the password-sharing fee will be extended to additional locations is unknown. In the interim, Netflix has also been developing a less expensive, ad-supported package. The only thing we can be certain of is that Netflix is concerned because its share price fell by 65% this year as a result of the disappointing results.