Netflix announced on Tuesday that it will be launching its crackdown on password sharing in the United States. For those who are currently sharing their account with someone who doesn’t live in the same household, it will cost an additional $7.99 per month to add a separate user to your account.
In an email sent to its U.S. customers, the company stated that “one Netflix account is for you and the people you live with” and that an additional fee will be necessary to share it with someone who lives outside of the household, They also included the option of transferring a profile to a new membership, which can then be paid for by someone else.
According to Netflix, paid sharing is already widely available in many countries including Canada, New Zealand, Spain, and Portugal.
As part of their crackdown, the company will be blocking all devices that attempt to access a Netflix account outside of the original household. Members, however, can continue to access the streaming platform while traveling via their phones or other personal devices or by logging in to a new TV.
The crackdown comes just a month after Netflix announced its plans for a “broad rollout of paid-sharing plans”.
Currently, Netflix doesn’t allow users on its ad-supported plan to add an additional member. It’s also not possible to add an extra member if the account is billed through a third party. Those who are added as an “additional user”, however, will be able to watch Netflix on any device and download titles (on one device at a time). The only limitation is that they can only have one profile.
In a letter to shareholders, the company warned that the paid sharing model will likely hurt subscriber growth. However, they also noted that paid membership has increased in Canada since the change.
According to Greg Peters, the co-CEO of Netflix, many password-borrowers are likely to convert to the new paid sharing plan as they watch as much content as a normal paying account. He also stated that those who watch less will be less likely to convert. However, he emphasized that it’s an important structural shift, one that will allow them to develop a one-on-one relationship with users without distorting prices. He also believes it will allow their revenue to grow.
The company also emphasized that its current subscriber totals do not include “extra users”.
