In just a few weeks, the streaming behemoth will begin charging users who allow others to log into their accounts. Netflix said it would enforce the rules “more broadly” by the end of the first quarter of 2023, so fans can expect a crackdown in April. The company behind Stranger Things and The Crown has long warned that the password-sharing loophole would be closed.
It’s a far cry from the early days when the company turned a blind eye to the money-saving scheme. Late last year, industry insiders said how much they believe Netflix will charge subscribers.
If people who do not live in your household log into your Netflix account, you will be charged extra fees beginning early next year.
Netflix hasn’t said how much this fee will be, but experts believe it will be around $2/£2 per month per bonus user. We spoke with industry insider and Wedbush Securities analyst Michael Pachter, who said Netflix could be in for a big payday.
“At the current price, I believe they will allow up to four accounts per household,” Michael said.
“And will charge a small monthly fee ($2) for ‘extra’ accounts. “I expect them to change this when a second location logs in (kid at school) and seek the $2 charge at that time.”
He went on to say: “They can probably capture 1 – 2 ‘extra’ accounts per subscriber. “If half of their 220 million accounts agree to pay $2 more per month, that’s $200 million per month.” Even so, sharing a login is still significantly less expensive than purchasing your own.
However, the burden will fall on the account holder, which may cause some contention. According to PP Foresight analyst and industry expert Paolo Pescatore, getting the price exactly right will be critical. “Netflix must tread lightly,” Paolo said.
“This has got to be well under a fiver to avoid any user backlash.
“Otherwise, some users may be forced to downgrade or cancel entirely.”
Cheap as chips
It comes just a few months after Netflix unveiled its new low-cost ad-supported subscription plan. Late last year, the streaming behemoth revealed that the new Basic With Ads tier would cost only $6.99/£4.99 per month. In comparison, the Netflix Basic subscription costs $9.99/£6.99.
It went live on November 3 and displays advertisements ranging from 15 to 30 seconds in length before and during series and films.
The new Basic With Ads tier went live in 12 countries, including Australia, Brazil, Canada, France, the United Kingdom, and the United States. “Basic with Adverts is everything people love about Netflix, but at a lower price and with a few ads in between,” Netflix’s Greg Peters explained.
The new plan, which Netflix first teased in April, includes the majority of the features of the Basic plan with a few minor differences.
Customers can stream in HD (720p) on up to one device simultaneously. Basic is also getting a 720p resolution upgrade.
Each hour, four to five minutes of video advertisements will be played.
Netflix has stated that it will avoid repeating advertisements. Due to licensing restrictions, a few films and TV shows will not be available on the new plan. There will also be no ability to download movies and series with Adverts on the app with Basic.
Sharing crackdown
The crackdown on sharing is set to begin in earnest very soon. On Thursday’s earnings call, the company provided the first indication of when the tougher approach will begin to affect more areas.
People will still be able to share accounts with family members.
Netflix, on the other hand, is aimed at people who do not live in the same house as you. It is estimated that 100 million accounts are shared outside of the owner’s household around the world.
“We expect to begin rolling out paid sharing more broadly later in Q1,” the company said.
“As we roll out paid sharing, members in many countries will be able to pay an additional fee if they want to share Netflix with people they don’t live with.”
The company anticipates that some irritated customers will cancel their subscriptions in response to the change.
Users are allowed to watch Netflix on a TV outside their home for up to two weeks, which should cover a holiday, according to some of the early test countries already facing a password-sharing ban.
“You can watch Netflix on a TV outside your home for up to two weeks if your account has not previously been used in that location,” according to the rules.
“This is only permitted once per location per year.”
Cleaning up your act
Netflix is also providing an exit strategy for account “piggybackers” who share logins. You can now remove your profile from the shared account.
Users can transfer their profile, including all of their recommendations and favorites, to another account.
Netflix is positioning Profile Transfer as something that is required when people move out or when a relationship ends.
“Whatever happens, let your Netflix profile be a constant in a life full of changes so you can sit back, relax, and continue watching right where you left off,” said Timi Kosztin, Product Manager in Netflix’s Product Innovation team.
