Proactive Investors - Netflix Inc (NASDAQ:NFLX) has begun its long-anticipated crackdown on password sharing in the UK and US, announcing users will be asked to pay extra or transfer accounts if sharing between different houses.
“A Netflix account is for use by one household,” the streaming giant said on Tuesday, confirming emails would start being sent to users who share accounts with others outside of their locations.
Netflix will ask people to either transfer accounts and pay separately to those in other households or opt to add an extra member for an additional US$7.99 per month in the US.
In the UK, users will be asked to pay an extra £4.99 a month on standard and premium accounts, where people are charged £10.99 and £15.99 respectively.
UK basic and standard subscribers who pay between £4.99 and £6.99 a month will not be able to add extra members to their accounts, as per Netflix’s website.
Holidaymakers, travellers and those watching on portable devices will still be allowed to use their own households’ account, Netflix confirmed.
Previous estimates from the streaming giant showed 100mln households, of 233mln global subscribers, were sharing accounts between different locations.
The move to charge users for account sharing will aim to boost revenues, though the scheme’s initial rollout in Spain cost Netflix 1mln users in the first three months of the year, Kantar data showed.
“If current trends are any guide this could prompt some initial cancellations which could slow subscriber growth,” CMC markets analyst Michael Hewson explained.
“However, if the name of the game is to maximise revenue, then there’s every chance that won’t unduly slow the overall trend to sustainable cash flow and steady margins.”
Netflix reported revenues of US$8.16bn in the first quarter, though an additional 1.75mln subscribers fell short of analysts' expectations.
Economic uncertainty and the ever-increasing pressure from rivals such as Disney+, Apple (NASDAQ:AAPL) TV and Amazon (NASDAQ:AMZN) Prime Video hit Netflix, which reported its first subscriber loss in a decade in early 2022, before suffering a 50% fall in share price during the year.