Advertisement
Australia markets open in 5 hours 42 minutes
  • ALL ORDS

    8,120.20
    -11.90 (-0.15%)
     
  • AUD/USD

    0.6667
    -0.0005 (-0.07%)
     
  • ASX 200

    7,851.70
    -12.00 (-0.15%)
     
  • OIL

    79.30
    -0.50 (-0.63%)
     
  • GOLD

    2,423.50
    -15.00 (-0.62%)
     
  • Bitcoin AUD

    104,524.19
    +1,821.87 (+1.77%)
     
  • CMC Crypto 200

    1,517.55
    +29.01 (+1.95%)
     

Netflix to charge you for sharing your password

A person watching Netflix on a laptop.
Netflix will start charging users more to share passwords across households. (Source: Getty)

Netflix will start charging users a penalty fee of around $4 (US$3) a month if their password is being used across multiple households.

Netflix said the new system would first be rolled out in Chile, Costa Rica and Peru, but didn’t say when it would affect other countries.

“We’ve always made it easy for people who live together to share their Netflix account, with features like separate profiles and multiple streams in our Standard and Premium plans,” Netflix said in a blog post.

ADVERTISEMENT

“While these have been hugely popular, they have also created some confusion about when and how Netflix can be shared.

“As a result, accounts are being shared between households - impacting our ability to invest in great new TV and films for our members.”

Netflix said it took a year to come up with the plan to charge users extra if they shared their account with others outside of their home.

Under the new plan, two new features will be rolled out:

  • Add an Extra Member: Members on Standard and Premium plans will be able to add sub accounts for up to two people they don’t live with - each with their own profile, personalised recommendations, login and password

  • Transfer Profile to a New Account: Members on Basic, Standard, and Premium plans can enable people who share their account to transfer profile information either to a new account or an Extra Member sub account - keeping the viewing history, My List, and personalised recommendations

“We recognise that people have many entertainment choices, so we want to ensure any new features are flexible and useful for members, whose subscriptions fund all our great TV and films,” Netflix said.

“We’ll be working to understand the utility of these two features for members in these three countries before making changes anywhere else in the world.”

Customers react

Many Netflix users took to Twitter to complain about the additional charge, with most pointing to already-high prices for the platform.

“I’ve already dropped my subscription to Netflix due to the last price increase. If people are paying higher prices then they should be able to share when they want,” one Twitter user said.

“This is a company trying to gouge more money out of users.”

Others felt as though it was their right to use the platform as they pleased if they had purchased the service.

“When someone buys a product, it’s their right to do with it as they want. If they share with someone that’s their choice as the subscriber,” another user said.

Netflix benefits

Jon Christian, founding partner of OnPrem Solution Partners, told Yahoo Finance in the US that the test would help the company "two-fold".

"First, it increases their total subscribers, often a market indicator for success. Secondly, more subscribers paying will generate more revenue for Netflix,” he said.

“The ability to add subscribers will require new ways of monetisation. At a time when there are multiple options for consumers, platforms may be more diligent on subscriptions.”

Netflix had been turning a blind eye to password sharing, with its CEO Reed Hastings saying it was “something you have to learn to live with”.

But, the streaming giant has seen a slowdown in subscriber growth and increased competition in recent quarters.

A chart showing the share price of Netflix since 2016.
A chart showing the share price of Netflix since 2016.

Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to the free Fully Briefed daily newsletter.