Netflix is shaking things up by adding a charge to users sharing accounts.
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Reason Behind The Move
It reported that of its 222 million paying households around the world, it estimates that it is being shared with over 100 million additional households.
This has resulted in a loss in revenue.
It recently reported that for the very first time in a decade it lost 2 lakh subscribers.
As a result its share prices also plunged to an all-time low.
The streaming giant is not going to freeze shared accounts.
How It Will Work
Rather it will set an extra fee for those accounts being used by multiple people outside of the home.
This means that multiple logins from the same geological location will likely be exempt from the extra charge.
Before implementing this, it will send an alert to account holders whose passwords are being used by other households.
It has already begun testing this in Peru, Costa Rica and Chile.
Experimental Features
In these markets it has rolled out two test features- “Extra Member” and “Profile Transfer.”
With “Extra Member,” standard and premium plan subscribers can add an account for up to two people who don’t live with them.
So if someone who doesn’t live under the same roof shares an account, for example distant family members or friends, the user will have to pay extra for their access.
The “Profile Transfer” feature allows subscribers of any plan to transfer their profile information — namely their viewing history — to a new paid account.
It is charging an additional fee to add “sub accounts” for up to two people outside the home.
The pricing is different per country — about $2.13 per month in Peru, $2.99 in Costa Rica, and $2.92 in Chile.
Will Take A Year
Chief Operating Officer Greg Peters explained the move.
He said that a person who shares an account with someone, for example, in a different city, an extra fee has to be paid to be able to continue sharing the account.
According to him, the sub user gets the benefit and the value of the service, but Netflix also gets the revenue associated with that viewing.
First OTT Site
He shared that it would take about a year to put its sub account pricing into use globally.
In doing so, Netflix has become the first major streamer to go on the offensive against password sharing.
Other streaming services will likely wait and watch the situation with Netflix before considering deploying similar plans.
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