After the fall in subscriber base in the first two quarters of this year, popular streaming platform Netflix will now charge an extra fee from users for sharing their passwords starting early next year.
After allowing customers to transfer their profiles to new accounts, the streamer says it will start letting users create sub-accounts in line with its plans to “monetize account sharing” more widely.
The streaming giant confirmed it will roll out the $6.99 / month ad-supported tier, called Basic, on November 3rd in the US, Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, and the UK.
However, the company did not reveal how much subscribers will be charged for sharing their passwords with other users in India.
Before implementing the password-sharing fee system, Netflix tested the scheme in Chile, Costa Rica, and Peru for about six months. This test established an account's primary residence as the "home" for the membership.
If the service spotted streaming at any additional households for more than two weeks, it asked the user to set up a new account and pay for additional "homes".
The company estimates more than 100 million people are currently using another household’s account worldwide.
Subscription loss
Earlier this year in July, Netflix reported losing subscribers for the first time in over 10 years, with the firm’s subscriber count dipping by another 1.3 million in the US and Canada and 1 million worldwide last quarter.
The company witnessed the highest growth when the pandemic hit in 2020 and people, stuck at home with limited option entertainment, flocked to monster hits like Squid game, and The Crown. It also pushed nearly all of Hollywood's significant media firms including Disney Plus, HBO Max, Peacock, Paramount Plus, and Apple TV Plus to pour billions of dollars into their streaming operations.
But as the situation normalized, Netflix struggled to attract new subscribers and maintain the loyalty of existing members, especially as there were multiple streaming options and also the rising cost of living led to people cutting back. Now, feeling the heat of intensifying competition to hold onto the subscribers' attention, Netflix is pursuing strategies it had dismissed for years.
