Netflix is testing a surcharge for subscribers who can share their credentials outside of their households.
The plan will be piloted in Chile, Costa Rica and Peru starting in the next few weeks. Adding an additional subscriber will cost 2,380 Chilean pesos or $2.97; $2.99 in Costa Rica; and 7.9 Peruvian sols, or about $2.11. The company said it would take time to evaluate results in the three initial countries before considering broader implementation of the levy.
The long-awaited containment of password sharing has arrived as Netflix faces a bumpier road to subscriber growth and higher competition than ever in the US. an affordable market, but making money from these subscribers will become increasingly difficult as the service matures and the growth curve flattens, as is the case in North America. Price increases have recently been implemented in the US and Canada. The fight against password sharing is another leverage that Netflix can use.
Newer competitors like Disney+ and HBO Max are taking a somewhat liberal approach to sharing, as are the current Amazon Prime Video and Hulu. But as programming costs skyrocket, there is a growing sense that companies will become less lenient, no matter how sensitive they may be. Netflix co-CEO Reed Hastings said last year that the company would be testing different approaches but would not implement anything that seemed to “tighten the screws” on customers.
In a blog post, Director of Product Innovation Chengyi Long wrote that Netflix “has always made it easy for people who live together to share their Netflix account with features like separate profiles and multiple streams on our standard and premium plans.”
Over time, she added, this functionality “created some confusion about when and how Netflix can be shared. As a result, accounts are spread across households, impacting our ability to invest in great new TV shows and movies for our members.”
Along with the ability to pay to share passwords, the company also allows subscribers who pay to expand an account to allow new signers to share profile information, including browsing history and other personalized data.
“We understand that people have many entertainment options, so we want any new features to be flexible and beneficial to members whose subscriptions fund all of our great TV shows and movies,” Long wrote. “We will work to understand the usefulness of these two features for members in these three countries before making changes anywhere else in the world.”