The End of Free Netflix Password Sharing Is Coming

    Netflix began testing account-sharing charges in Latin America after its global membership declined for the first time in a decade.
    James Martin/CNET
    

    Netflix?is ratcheting up its efforts to get freeloading viewers to pay up: Starting early next year, it will start charging accounts for password sharing, instituting a system that adds fees for “extra member” subaccounts when people outside one household use the membership. ?
    The company didn’t specify the price of these new fees when it confirmed the plan last week. But this change is already being tested in a few Latin American countries, where Netflix is charging a fee for each extra member that’s equivalent to roughly one-quarter the price of a Standard plan.?
    If?Netflix?sticks to that practice, then each extra member subaccount in the US would cost between about $3.50 and $4 — possibly as much as $4.43, based on the fee level in Chile.?
    And if it keeps to the norms of those account-sharing tests, Netflix is also likely to make these “extra member” fees available only on its $15.50-a-month Standard and $20-a-month Premium plans, which both allow more than one simultaneous stream.?
    Netflix hasn’t offered an option for these “extra member” fees on its Basic plans in the tests. Netflix’s $10-a-month Basic tier and a new plan coming next month — $7-a-month Basic with Ads — both limit your watching to a single simultaneous stream, which makes account-sharing functionally difficult.
    Netflix didn’t detail how it will enforce unpaid password sharing once the fees roll out widely.?
    After years of being relatively laissez-faire about password sharing, Netflix started testing ways to “monetize account sharing” after recording its deepest subscriber losses ever earlier this year. In addition to the password-sharing fees, Netflix plans to launch cheaper subscriptions supported by advertising next month.?
    Netflix’s dominance of streaming video — not to mention years of unflagging subscriber growth — pushed nearly all of Hollywood’s major media companies to pour billions of dollars into their own streaming operations. These so-called?streaming wars?brought about a wave of new services, including?Disney Plus,?HBO Max,?Peacock,?Paramount Plus?and?Apple TV Plus. This flood of streaming options has complicated how many services you must use (and, often, pay for) to watch your favorite shows and movies online.?
    Now, feeling the heat of intensifying competition to hold onto your attention and your subscription, Netflix is pursuing strategies it had dismissed for years.?
    The password-sharing fee system that Netflix will roll out appears to be modeled on a scheme it has been testing in Chile, Costa Rica and Peru for about six months.?
    The day before revealing its plans for a wider rollout of these account-sharing fees, Netflix presaged the announcement by launching a profile-transfer feature, which is a key component of the password-sharing fees tested in Chile, Costa Rica and Peru. This feature lets a profile created on a shared Netflix account transfer its watch history and recommendations to a new, independent account. This new account can then be added to somebody else’s Standard or Premium subscription plan as an extra member, or it can sign up for its own membership.?
    In July, Netflix said it would be testing a different method in Argentina, the Dominican Republic, El Salvador, Guatemala and Honduras. This test established an account’s primary residence as the “home” for the membership. If the service detected streaming at any additional households for more than two weeks, it would prompt the account to set up — and pay for — additional “homes,” with a limit on how many additional homes you can add depending on how much you’re already paying for Netflix. Netflix appears to be eschewing this model in favor of the other one it tested.?