Action against Netflix password sharing begins in the US

NetflixAction against the disclosure of passwords has also reached the United States

The streaming service said it began alerting its members to its new sharing policy on Tuesday, noting that Netflix accounts would only be allowed to be shared within a household.

“Your Netflix account is for you and the people you live with — your household,” the company said in an email it sent to its own address blog on Tuesday.

The email goes on to say that members can transfer a profile to someone outside of their household so that person can start a new membership, paying for themselves. Or they pay an additional fee – $7.99 per month – per person outside of their household through their account.

See Netflix subscription plans book pagenotes that additional members can be added to its Standard and Premium plans without ads.

Shortly after the company’s growth began to falter, Netflix warned it would tighten its password-sharing policies to boost revenue and subscribers.

Originally, Netflix had assumed that later in the first quarter, Netflix would crack down on people who borrow other accounts to create their own profiles. However, in an earnings announcement last month, Netflix alerted investors and customers that it would push through to the second quarter.

According to the company, more than 100 million households share accounts, which is about 43% of its global user base. Because of this, Netflix has hampered its ability to invest in new content.

Earlier this year, Netflix unveiled password sharing guidelines in four more countries: New Zealand, Canada, Portugal and Spain. Netflix said it will ask members in those countries to set a “primary location” for their accounts and will allow users to set up two sub-accounts for those not residing in their home base for additional fees.

In Tuesday’s announcement, the company made no such specifics for US households, instead offering the two options of either transferring a profile or paying a fee for an additional member.

The company said it has seen an impact on its subscriber growth internationally, where it rolled out such initiatives back in the first quarter. Still, Netflix managed to add 1.75 million subscribers during the quarter.

In Latin America, Netflix executives said there were cancellations after the news broke, which would hurt near-term growth. However, these password borrowers would later activate their own accounts and add existing members as “additional member” accounts. As a result, the company achieved higher revenues, it said.

Netflix executives have likened the move to paid sharing to price hikes: people balk at first and quit, then slowly come back and sign up for their own accounts.

To boost revenue, Netflix has not only cracked down on password sharing, but recently introduced a cheaper, ad-supported tier. Both actions came in response shortly after Netflix reported its first subscriber loss in more than a decade in early 2022.

Media companies everywhere have been looking for ways to make their streaming offerings profitable, resorting to methods such as cutting content costs, advertising, and finding other ways to attract more customers to their platforms.

On Tuesday, Warner Bros. Discovery has relaunched its streaming service as Max, which is a combination of its HBO Max and Discovery+ services.

Paramount Global also announced this week that the combined app Paramount+ with Showtime will be available in late June. Disney also recently announced plans to add Hulu content to Disney+.