Netflix, as part of new ways to make money after years of massive growth, is expanding its push to charge people for sharing accounts.
The streaming service said it would ask subscribers in five countries in Central and South America to pay an extra $2.99 (£2.50) per month to add a “second home” to their accounts, warning that the clamp down on password sharing will spread worldwide.
The latest announcement came ahead of its results which are due on Tuesday, July 19, 2022. Earlier this year (2022), the company announced its first subscriber fall in more than a decade. The firm is due to provide an update on its members along with its results, in which it is expected to reveal the fall in subscribers increasing.
It is a stark reversal for a company that for years saw seemingly unstoppable growth, as it revolutionised the way people around the world consume entertainment, shaking up the traditional television and movie theatre business.
What Made Netflix More Popular?
Its position as a global giant was cemented when the pandemic hit in 2020 and people, stuck at home with few other options for entertainment, flocked to its shows.
But as pre-pandemic habits return, Netflix is struggling to attract new sign-ups, and maintain the loyalty of existing members. Price hikes prompted people in countries such as the UK to cancel subscriptions, while a raft of new competitors, like Disney, many of which used to sell their movies and television series to Netflix, tempt audiences in the US and elsewhere to switch.
Research suggested that people are increasingly signing up to watch specific shows and then cancelling accounts. It is not clear how families will respond to the firm’s request for more money for shared accounts. In March 2022, Netflix said it would charge households in certain countries such as Chile to add an “extra member”.
The latest move, which takes effect from next month (August 2022) in Argentina, Honduras, Guatemala, El Salvador and the Dominican Republic, presents the request in slightly different terms, seeking $2.99 for each additional home.
However, Netflix added that people can edit their accounts to remove homes at any time, it said. The firm said it expects to experiment with different ways of presenting the charges before rolling them out globally as soon as the end of this year (2022).
Paying Attention to Account-Sharing
When things were going well, Netflix could afford to ignore account sharing, but Guy Bisson, who is the Executive Director at Ampere Analysis, said it now makes sense to try to tap into the people sharing passwords, even at the risk of alienating some,
“I think they’ll probably gain more than they would lose from doing this. They can roll it out sequentially and gradually and make sure it’s having the effect they expect.”
Guy Bisson, Executive Director at Ampere Analysis
In addition to trying to get more money out of existing audiences with the password-sharing crackdown, Netflix said it will experiment with a lower-cost ads-based service.
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