Netflix has started its long-promised crackdown on password sharing in major markets including the UK and the US. The streaming giant said it was notifying customers that they must pay £4.99 per month, or $7.99 in the US if they want to share their account with someone outside their homes. The move is intended to boost subscribers. But in some countries where it has already been trialled, some are baulking at the expense.
In Spain, when it started charging 5.99 euros (£5.27) for an additional account, it lost more than a million subscribers in the first three months of the year, according to Kantar. On Tuesday Netflix sent an email about sharing accounts to customers in 103 countries and territories including Australia, Brazil, France, Germany, Mexico and Singapore.
The company previously warned investors there would be cancellations as it expands its programme, but said: “Longer term, paid sharing will ensure a bigger revenue base from which we can grow as we improve our service”. In Canada, where the changes were introduced in February, its paid membership base is now larger than it was before the changes, and revenue growth picked up, it said previously. Netflix had previously estimated that more than 100 million households share passwords despite this being against its official rules.
The company wants to tap into this audience to make more money, as its subscriber growth slows and increased competition challenges its dominance of the streaming market. Heavyweights such as Disney and Amazon have weighed in with their own services, and Netflix has a host of other rivals. These entertainment giants are vying for customers, many of whom have been under pressure from the soaring pace of general price rises.
Netflix has been trying to tempt users with a less expensive streaming option with ads, and cut prices in 116 countries in the three months to March. It has also been expanding its paid sharing programme, which it started trialling in some countries last year. The move to notify customers brings the scheme to some of the company’s most important markets. Netflix has 233 million subscribers globally.
