Netflix Begins Crackdown on Account Sharing in Four Countries, US to Follow
By Movieguide® Contributor
Netflix recently rolled out a plan to crackdown on account-sharing in Canada, New Zealand, Portugal and Spain.
The change comes with a new effort by Netflix to turn non-paying account users into paying subscribers.
This plan requires the primary account holders to set a location for their household, which Netflix defines as “people who live in the same location as the primary subscriber.”
According to The Hollywood Reporter, Netflix will determine if someone is part of the primary household “based on information like whether a device has used the Wi-Fi from the primary location at least once a month.”
A new “paid sharing” feature allows primary subscribers to add up to two people outside of their household to the account for an additional price.
This fee increase results in “an extra CAD$7.99 a month per person in Canada, NZD$7.99 in New Zealand, 3.99 euros in Portugal and 5.99 euros in Spain.”
While the new plan hasn’t been implemented in the United States yet, the policy is expected to roll out sometime in the coming months.
This isn’t the only new method Netflix is using to make up for lost revenue. Movieguide® previously reported:
Netflix plans to launch an ad-supported subscription option with Microsoft in early 2023 so the company can reach a broader customer base.
“We’ve left a big customer segment off the table, which is people who say: ‘Hey, Netflix is too expensive for me and I don’t mind advertising,’” Netflix Co-CEO and Chief Content Officer Ted Sarandos said during a panel at the Cannes Lions Festival.
This announcement comes after major subscriber losses over the last two quarters. In the second quarter, Netflix lost nearly 1 million subscribers.
While this was only half the expected loss, CEO Reed Hastings explains that “our excitement is tempered by the less bad results.”
Sarandos explains, “We adding an ad tier; we’re not adding ads to Netflix as you know it today. We’re adding an ad tier for folks who say, ‘Hey, I want a lower price and I’ll watch ads.’”
People reports that “as Netflix increases subscription prices, the platform sees an opportunity for lower subscription fees, if a patron is willing to watch ads.”
However, some content will not be eligible for additional advertising.
“Today, the vast majority of what people watch on Netflix, we can include in the ad-supported tier,” Sarandos said.
“There’s some things that don’t and we’re in conversations with the studios on, but if we launched the product today, members in the ad-tier would have a great experience,” he continued. “We will clear some additional content but certainly not all of it but don’t think it’s a material holdback for the business.”
Because Netflix-created content does not go through a third party, their shows will be available on the new ad tier, including series like STRANGER THINGS, which Hasting credits for the smaller-than-expected subscriber drop.
Despite the losses, the company remains hopeful. “We’ve been through hard times before,” the company said in its shareholder letter. “We’ve built this company to be flexible and adaptable, and this will be a great test for us and our high-performance culture.”
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