Netflix targets households, not users, with new password-sharing strategy

Netflix targets households, not users, with new password-sharing strategy

Has Netflix cracked its password-sharing crackdown? Netflix is switching up the way it tackles password-sharing freeloaders. 

The streaming service has started testing a different “add a house” function in Argentina, the Dominican Republic, El Salvador, Guatemala, and Honduras. This comes after the company had introduced a “add another member” price for users in Chile, Costa Rica, and Peru.

By paying a nominal charge (currently $2.99 / £2.50 / AU$4), bill-paying clients now have the option of adding whole households—rather than single users—to their current monthly subscriptions. Members of Netflix’s basic plan may add one additional house, while those on its standard and premium plans can add up to two more homes, according to a blog post announcing the change.

The “manage houses” function in the Netflix settings will allow members who decide to buy these extra homes to oversee where their accounts are being used and delete homes at any moment.

Although it’s not yet obvious which of the two approaches now being tested will be implemented globally, Netflix officials have been outspoken about their ambitions to extend password-sharing fees to key international countries like the US and UK in the “near to mid-term.”

Intriguingly, test subjects have apparently complained about the way password-sharing payments have been advertised, enforced, and applied throughout the “add another member” trial’s opening months in Chile, Costa Rica, and Peru.

A recent study found that many of individuals affected, at least in Peru, are upset by Netflix’s ambiguous definition of “home” and unclear about whether they are subject to the extra price.

The streamer’s testing of a whole new (and maybe easier) method in Argentina, the Dominican Republic, El Salvador, Guatemala, and Honduras makes sense in light of this.

As for why Netflix is cracking down on account-sharing freeloaders, the streamer says that “widespread account sharing between households undermines [its] long-term ability to invest in and improve [the Netflix] service.” Company executives estimate that more than 100 million non-paying households exist worldwide, with over 30 million in the US and Canada alone.

More than ever, Netflix has to maximize its income potential given the streamer’s recent subscriber losses as well. In any event, we may hear more about how and when these password-sharing fines will apply to Netflix customers throughout the world during the company’s second-quarter earnings call, which is scheduled to take place later today (June 19).

If indeed they do in the not-too-distant future, would you prefer to pay a surcharge per househould, or per user? Vote in our Twitter poll below:

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