Netflix is looking for another way to charge for password sharing
Netflix Inc. will ask customers in five Latin American countries to pay a fee if they wish to use their account within an additional period.
home, a test the company hopes will generate additional revenue by requiring customers to pay to share their Netflix account.
Customers in Argentina, El Salvador, Guatemala, Honduras and the Dominican Republic will have to pay additional fees if they use an account for more than two weeks outside their primary residence, the company said Monday. It will not affect the use of Netflix on mobile devices such as smartphones, tablets or laptops, or people on vacation. The extra house will cost 219 pesos ($1.70) in Argentina and $2.99 in other countries.
Netflix said more than 100 million households use accounts paid for by other people, and blamed password sharing as one of the main reasons for its poor subscriber growth. The company lost 200,000 customers in the first quarter and expected it would lose 2 million more in the second. Its share price has fallen more than 65% this year as investors fear the streaming business is in trouble.
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“Today’s widespread account sharing between households undermines our long-term ability to invest and improve our service,” Chengyi Long, director of production innovation, said in a blog post.
Password sharing has been particularly high in Latin America, where Netflix is conducting its first two tests to see if people will pay for access. The company is trying to limit sharing without punishing people who already pay for Netflix or alienating viewers. The effort has sometimes been described as a crackdown, leading some customers to fear losing access to their account.
The company is testing ways to charge additional fees if people want to use the same Netflix account. In its first effort, the company asked customers in Chile, Costa Rica, and Peru to pay an additional fee to add a member to an account. This new member creates a sub-account with their own email address, gets their own stream, and can use Netflix alongside the primary account holder within the limits of their plan.
A basic plan allows customers to watch on one device at a time. The most expensive standard plan allows two separate devices and the premium plan allows four.
This last test is for customers who use the same account in multiple households. If they use an account somewhere other than one of their paying households for more than two weeks, they will receive an in-app notification asking them to either add a household or change their primary household to the new location .
Customers can manage their homes, adding or removing them as they please. Adding households does not increase the number of people who can watch Netflix at the same time.