Streaming giant, Netflix, has finally made the move to enforce password sharing fees for anyone using a Netflix account that does not live in the same household.
Netflix has been teasing the enforcement of these fees for quite some time now, telling users that consequences for sharing account passwords would be coming. Many users have been in disbelief that a platform as large as Netflix is truly struggling financially enough to impose the new fees. However, this Tuesday, Netflix announced that it is officially launching their new terms and conditions as it relates to account sharing.
Netflix sent out an email to all US users saying, “Your Netflix account is for you and the people you live with in your household.” The new options available to users include the ability to transfer profiles for those outside the household to a new membership, or pay an additional member fee. Eventually, Netflix is expected to begin blocking certain device access if a proper action is not taken regarding password sharing. Also, customers that use the ad-supported plan will not have the option to add an extra member to their account, meaning anyone they share their password with will be forced to switch to a separate membership account.
In their Q1 letter to their shareholders, Netflix announced that a “cancel reaction” is being seen but it was not entirely unexpected. Co-CEO of Netflix, Greg Peters, said, “It’s very much like a price increase — we see an initial cancel reaction. And then we build out of that, both in terms of membership and revenue as borrowers sign up for their own Netflix accounts, and existing members purchase that extra member facility for folks that they want to share it with.”
Since paid sharing isn’t yet available in all countries, there is speculation that significant backlash from customers could stop Netflix in their tracks with the sharing fees. However, information from Netflix tells us differently; despite seeing rises in membership cancellations right now, they remain confident that the company will overcome and continue to grow.