The United States is now included in Netflix’s crackdown on users who share their passwords.
The video streaming service said on Tuesday that it has started notifying subscribers about its new policy on account sharing. According to the company, Netflix memberships should only be shared among members of the same household.
“Your Netflix account is for you and the people you live with — your household,” the business wrote in an email, which it shared on its blog on Tuesday. “Your Netflix account is for you and the people you live with.”
The following information is included in the email: Members may transfer the profile of someone who does not live in their home to another individual, who can then start a new membership that they are responsible for paying for on their own. They also have the option of paying an additional $7.99 per month for each individual who does not live in their home but uses their account.
On the website detailing Netflix’s membership options, it is stated that additional users may join either the regular or premium plan without being subjected to advertisements.
Soon after the firm started seeing a plateau in growth, Netflix issued a warning that it would be tightening its limits on the sharing of passwords in an effort to increase its income and the number of subscribers it had.
Initially, it was anticipated that Netflix would begin its crackdown on users who borrow other accounts in order to build their own profiles at the end of the first quarter. However, during an earnings call that took place a month ago, the company informed investors and consumers that it would be delaying the action until the second quarter.
The streaming service has reported that more than 100 million households share accounts, which amounts to around 43 percent of its total user base worldwide. Netflix has said that this has made it more difficult for the company to invest in fresh programming.
In the beginning of this year, Netflix provided instructions about the sharing of passwords in a total of four more countries: New Zealand, Canada, Portugal, and Spain. Netflix has announced that it will require customers in those nations to choose a “primary location” for their accounts. However, users will be able to set up two additional sub-accounts for family members and friends who do not reside in their primary area.
In the letter that was sent out on Tuesday, the firm did not disclose such information for American families. Instead, it provided the two alternatives of moving a profile or paying a charge for an additional member of the household.
The business said that the implementation of such efforts during the first quarter had an effect on the rate of subscriber growth in certain overseas markets. However, Netflix was still able to increase its user base by 1.75 million throughout the quarter.
Executives from Netflix have said that the company had cancellations throughout Latin America after the news was made public, which will have an impact on the company’s near-term development. However, they discovered that the individuals who had borrowed passwords would subsequently activate their own accounts and join existing members as “extra member” accounts. According to the executives, this has led to an increase in income for the firm.
Executives at Netflix have compared the move to paid-sharing to the way customers react when prices go up: at first, they baulk and cancel their subscriptions, but eventually, they come back and sign up for their own accounts.
Netflix has recently implemented a lower tier that is financed by advertisements in addition to its recent crackdown on the sharing of passwords in an attempt to increase revenue. Both of these responses have been implemented in the wake of Netflix’s announcement in early 2022 that it had seen its first drop in subscriber numbers in more than a decade.
The majority of media firms across the board have been searching for ways to make their streaming programmes successful. These businesses have relied on strategies such as reducing the costs of their content, increasing their advertising, and finding other ways to attract more users to their platforms.
Max is the new name of the streaming service that Warner Bros. Discovery reintroduced on Tuesday. Max is a combination of the services that HBO Max and Discovery+ provide.
This week, Paramount Global also announced that the unified app for Paramount+ and Showtime will be ready for download at the end of June. In addition, Disney just made the announcement that it would be integrating content from Hulu into Disney+.