Netflix detailed plans to crack down on password sharing in the next year.
“Paid sharing” will enable users to move their Netflix profile into their own account, starting in early 2023. An “extra member” sub-account profile will soon be available for users who share accounts, enabling account owners to pay for family and friends.
“We’ve landed on a thoughtful approach to monetize account sharing,” the company said in a letter to shareholders. “We are going to offer the ability for borrowers to transfer their Netflix profile into their own account, and for sharers to manage their devices more easily and to create subaccounts (“extra member”), if they want to pay for family or friends.”
Netflix lost around 1.2 billion subscribers in the first half of 2022, with the company placing part of the blame on subscribers who share accounts with friends and family. The company estimates that about 100 million households participate in account sharing.
In response, Netflix started exploring several ways to do crack down on password sharing in Latin America earlier this year.
In March, Netflix developed a profile-transfer tool for users in Chile, Costa Rica and Peru that allowed them to take their profile data and transfer it to a new account. In that test, paid subscribers were offered an “add an extra member feature” that will allow them to add subsidiary accounts for up to two people outside of their household with their own profile, personalized recommendations, login and password.
In August, Netflix launched a separate test for an “add a home” function in Argentina, the Dominican Republic, El Salvador, Guatemala and Honduras at a lower cost than a standard subscription.
“We have been working really hard to try and find essentially a balanced position, an approach toward this that supports customer choice and, frankly, a long history of customer-centricity that we think has informed how we think about establishing our service, but balancing that with making sure that as a business we are getting paid when we are delivering entertainment value to consumers,” said Netflix COO and Chief Product Officer Greg Peters during the prerecorded third-quarter earnings call.
“We’ve tried a couple different approaches in different countries, you saw that, and based on the customer feedback that we’re getting, we sort of landed on an approach toward paid sharing that we think strikes that balance,” he added.
Earlier this week, Netflix launched a Profile Transfer feature that makes it easier for password-sharing users to set up their own accounts. The new tool allows users to move their profile while keeping all of their customized recommendations, viewing history, My List, saved games and other preferences.