Netflix has kicked off its crackdown on password sharing in the United States and over 100 other countries. The streaming platform revealed details of how it will affect viewers and how much it will cost to retain “extra members” on Tuesday.

Extra Charges for Additional Membership

Netflix has finally taken steps to crack down on password sharing in the United States and global markets.

According to the new regulations, subscribers in the U.S. will have to either remove other users from their accounts or pay $7.99 per month for an additional membership.

This development comes as the streaming platform seeks to protect its content while expanding its revenue stream.

Although the company has permitted password sharing among users for years, the practice has become too widespread and is now affecting its net income.

Netflix had initially intended to launch “paid sharing” in the United States during the first quarter of 2023.

However, the streaming platform has decided to implement the new update, which aims to turn account sharers into paying customers, a little later, on or before June 30.

Furthermore, the company has also provided tools to help current users with this transition.

A “Transfer Profile” option will allow subscribers who share a Netflix account with someone else to move their existing account data, such as their watchlist and viewing history, to their new account.

New Development to Expand Globally

Netflix had already begun testing the extra payment feature in the Latin American regions prior to the expansion of the feature to Canada, New Zealand, Portugal, and Spain, earlier this year.

Members of these countries can set up a “primary location” for their Netflix account, allowing anyone in their household to access their account.

And when a user who doesn’t reside in the household uses their account, they will be notified to “buy an extra member.”

The streaming site will permit up to two additional users per account, and the cost per additional user will vary by region.

Netflix sharing
Source: TechCrunch

For instance, it will cost an additional CAD $7.99 in Canada, while it will cost €3.99 in Portugal.

In its first-quarter 2023 financial report, the platform stated that the action is not limited to the U.S. but is planning a broad rollout in Q2.

Going forward, it will now be accessible in a wider range of international marketplaces, including those in Brazil, Bolivia, Belize, France, Germany, Iceland, Ireland, Italy, the Philippines, Malaysia, Israel, Thailand, Taiwan, Switzerland, Sweden, and other countries.

Will NetFlix Balk at the Subscribers’ Reaction?

Password sharing has been a common practice among Netflix users, with many taking advantage of the platform’s subscription model to share their login credentials with family, friends, and acquaintances.

This practice has allowed multiple individuals to enjoy Netflix’s vast library of movies and T.V. shows without subscribing individually, effectively costing the company potential revenue.

In terms of revenue, Netflix’s performance in the first quarter of 2023 fell short of analysts’ expectations.

The corporation reported earnings of $8.16 billion for the quarter, although Wall Street had projected $8.18 billion.

However, it announced higher-than-expected earnings of $2.88 per share, while analysts had predicted $2.86 per share from the company in the first quarter.

This recent development has been met with strong consumer backlash, and some users have taken to Twitter to express their displeasure.

According to one user, Netflix underestimates the number of subscribers who rely on their families and friends to stream the site. He also stated that the site should anticipate financial losses.

Another user also predicted that the action would lead to Netflix’s demise.

On the other hand, Netflix has assured its investors that, despite early cancellations, they believe the password restriction will benefit the company’s long-term growth and financial health.

Previous testing conducted in other countries suggested Netflix might rebound after its password crackdown.

However, the streaming giant will have to see if the password crackdown in the U.S., its biggest and most important market, will also bring benefits in the long term, with increasing competition from other streaming sites for consumers’ time and money.

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