Netflix is planning to crack down on password sharing by rolling out paid sharing more broadly in the first quarter of 2022. This means that by the end of March, it’s possible you won’t be able to give out your password for free. Netflix said account sharing affected over 100 million households, which “undermines our long term ability to invest in and improve Netflix.” Paid sharing has already been trialed in Costa Rica, Chile, and Peru, where it cost $2 to $3 to add an extra member account for someone living outside a given household. The planned broader rollout of the sharing charge follows the November launch of an ad-supported subscription tier, where users are shown up to five commercials an hour.
You may have less than 10 weeks left to share your Netflix password with people outside your home before the company starts charging for the privilege.
The Background
Netflix first hinted at a crackdown on password sharing in July after its first subscriber loss in over a decade during the first quarter of 2022. In a letter to shareholders Thursday, Netflix said it expected to “roll out paid sharing more broadly” later in the first quarter.
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The Impact of Account Sharing
Netflix said account sharing affected over 100 million households, which “undermines our long term ability to invest in and improve Netflix.” It added that while its terms of use already limited account use to a single household, “we recognize this is a change for members who share their account more broadly.”
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The New Policy
“As we roll out paid sharing, members in many countries will also have the option to pay extra if they want to share Netflix with people they don’t live with,” the shareholder letter said. Subscribers will be able to transfer a user profile to a new account, it added.
Trials in Latin America
Paid sharing has already been trialed in Costa Rica, Chile, and Peru, where it cost $2 to $3 to add an extra member account for someone living outside a given household. Peruvian Netflix subscribers reported the policy was confusing and there was no enforcement of the rule.
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Impact on Subscriptions
The shareholder letter said some Latin American users canceled their subscriptions as a result of the sharing charge. Netflix added that it expected near-term engagement to fall, but overall revenue should improve as people who borrowed accounts begin subscribing themselves.
Other Changes
The planned broader rollout of the sharing charge follows the November launch of an ad-supported subscription tier, where users are shown up to five commercials an hour.
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Netflix’s Response
Netflix did not immediately respond to a request for comment.
