Netflix has stated this week that it wants to end the practice of password sharing.
The company aims to charge an extra fee for those accounts being used by multiple people outside of the home.
Netflix’s plan to capture that lost revenue would start with an alert being sent to account holders whose passwords are being used by other households.
Peru, Costa Rica, and Chile are already undergoing this test feature. The pricing is different per country — about $2.13 per month in Peru, $2.99 in Costa Rica, and $2.92 in Chile, based on current exchange rates.
“If you’ve got a sister, let’s say, that’s living in a different city, you want to share Netflix with her, that’s great,” said Chief Operating Officer Greg Peters during the company’s earnings conference call. “We’re not trying to shut down that sharing, but we’re going to ask you to pay a bit more to be able to share with her so that she gets the benefit and the value of the service, but we also get the revenue associated with that viewing.”
“It will take a while to work this out and to get that balance right,” he said. “And so just to set your expectations, my belief is that we’re going to go through a year or so of iterating and then deploying all of that so that we get that solution globally launched, including markets like the United States.”
Netflix will be the first one in the industry to make these changes.
However, it will be an ordeal to determine who pays the extra amount of a sub-account and who doesn’t.
Five years ago, Netflix encouraged password sharing for a wide audience. That strategy proved to be successful.
In 2017, Netflix’s corporate account tweeted “Love is sharing a password.”