Netflix is testing a new way to tackle password sharing in Argentina, El Salvador, Guatemala, Honduras, and the Dominican Republic (as reported first by Bloomberg). The test will prompt users to pay an additional fee if they use an account outside their household for over two weeks, costing an extra 219 pesos ($1.17 in Argentina) and $2.99 everywhere else.
According to Netflix, in the test areas, Subscriber accounts have one primary “home” where they can access Netflix across their devices, and they have the ability to travel and use Netflix on the go. The test will allow users to purchase additional “homes,” giving the users in those locations the ability to use the service on devices at those locations as well. In these countries, Netflix is also working on a feature that will let you track where your account is being used and restrict access. If you’re on the Basic plan, you can add one extra home, if you’re on the Standard plan, you can add up to two, and on Premium, you can add up to three.
“It’s great that our members love Netflix movies and TV shows so much they want to share them more broadly,” Chengyi Long, Netflix’s director of product innovation, said in a statement. “But today’s widespread account sharing between households undermines our long term ability to Invest in and improve our service.”
This expands on Netflix’s existing test that pushes subscribers in Costa Rica, Peru, and Columbia to pay extra for users living outside their households. Netflix is currently charging users an extra 2,380 CLP ($2.52 USD) in Chile, $2.99 USD in Costa Rica, and 7.9 PEN ($2.02 USD) in Peru to add up to two additional “subaccounts” to an existing account. The company also started experimenting with a profile transfer tool that’s supposed to make it easier for someone to transfer their recommendations, watch history, and My List. This is a way for the platform to passively nudge password sharers towards opening a new account or getting on a subaccount.
In May, a report from Rest of the World Revealed confusion among subscribers who are part of the test in Peru. Some subscribers were reportedly unsure about Netflix’s definition of a “household,” while others were able to get around a prompt meant to validate account owners. Netflix has not specified how it determines the difference between home and a Subscriber who is traveling or what happens if they decline to pay extra when asked.
Netflix first announced it would be testing ways to charge for password sharing in March, just a few weeks after it announced price increases for US customers. Netflix is also working on an ad-supported subscription option and, just last week, said it would partner with Microsoft to power its advertisements. The company has clear reasons to look for new ways to generate revenue; in April, after a Subscriber boom earlier in the pandemic, it announced in April that it had lost subscribers for the first time in more than a decade. The company’s next Quarterly earnings report will be released on Tuesday afternoon.
Disclosure: The Verge recently produced a series with Netflix.