What happens when you reach peak subscription? This is the place that Netflix finds itself in now and has resorted to cracking down on accounts that have multiple users to expand its subscription base. This comes a few weeks after announcing its latest price hike in the USA. Today, Netflix announced it’s cracking down on the widespread practice of password sharing between people who don’t live in the same household by prompting them to pay an extra fee for the privilege.
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In a blog post, Chengyi Long, director of product innovation, says, “While these have been hugely popular, they have also created some confusion about when and how Netflix can be shared. As a result, accounts are being shared between households — impacting our ability to invest in great new TV and films for our members.”
The company is testing the new service and during a test period, Netflix will try out its approach in three countries: Chile, Costa Rica, and Peru. There, in addition to the ability to transfer viewing profiles into new accounts (either your own primary account or someone else’s), subscribers will get prompts to add an extra viewer to their package at a discounted price: 2,380 CLP in Chile, 2.99 USD in Costa Rica, and 7.9 PEN in Peru.
This is not the first time Netflix has experimented with a clampdown on password sharing. Last year, the company experimented with an account verification tool to keep unauthorized users from being parasites of others’ accounts.
But the addition of “add an extra member” and “transfer profile” features indicate that Netflix is thinking strategically about how it can keep growing as the company’s subscriber numbers continue to remain unchanged. If Netflix plans to hold the throne as streaming king, it needs to keep funding ever more expensive originals. That money’s got to come from somewhere; Long effectively said as much in Netflix’s announcement today.
