Netflix Is About To Charge Users A Ton Of Money In Fees?
In an effort to stop hemorrhaging money, Netflix announced that will start to implement user fees when they detect instances of account sharing.
This article is more than 2 years old
Netflix executives announced a new strategy to stop account sharing alongside their quarterly earnings report. In early 2023, the company will impose user fees for those who give away their login information to people who haven’t paid for a Netflix subscription. This company decision comes after months of providing password-limiting repercussions for users in certain South American countries.
In July, Netflix started a pilot program to limit password sharing in South American and Central American countries like Argentina, El Salvador, Guatemala, Honduras, and the Dominican Republic. The goal was to see if the program would be successful enough to implement in countries where Netflix was more popular, like Canada and the United States. Now, the streaming service decided to expand its program to include user fees, punishing those who share their login information with friends or family.
Netflix will look at the “Who’s Watching?” screen to determine who uses the account outside the payer’s household. The company has yet to explain how it intends to figure out who on the account lives outside the home, and there are definite ways to watch movies and TV shows without adding a new profile. Netflix has yet to unveil its spying strategies, but the company has been transparent that it will charge violators if they’re caught sharing password information.
Though Netflix was one of the first prominent streaming service companies to make a significant impact, its users have slowly depleted in 2022. When the lockdown started, Netflix and similar platforms like Hulu and HBO Max gained considerable subscribers due to quarantine, but those numbers have slowly tapered off. Netflix is attempting to regain its subscribers and profit margin, though charging its loyal users may not be the best strategy for customer retention.
Though Netflix had been losing subscribers all year, its last quarter saw an expected user increase due to the success of shows like Stranger Things and Monster: The Jeffrey Dahmer Story. The platform added 2.4 million new subscribers during its third financial quarter, a positive win for a company that was steadily deteriorating during the spring and summer months. Though investors may be happy with the positive news, Netflix’s success is still precarious and will rely on continuous user growth to maintain its financial standing.
Netflix hasn’t announced how much they’ll charge perpetrators who share passwords with people outside their homes, but publications have a few educated guesses. Engadget.com looked at the company’s pilot-program model for answers, which billed users “one-quarter of the basic rate” for account-sharing violations. After doing the math, Netflix subscribers caught password sharing could be charged $3 to $4 per incident.
Netflix is giving subscribers a tool to limit account sharing in case something happens where a hacker gets a hold of a user’s information unwarranted. The company released its plans for a mitigation tool that would transfer all of a subscriber’s subaccount info, like one’s viewing history, to an independent subscription. Alongside this group of announcements, Netflix said it would soon unveil a cheaper, ad-supported subscription package for $7 a month for Mexico, the United Kingdom, and Canadian residents.
