Netflix to U.S. password sharers: Time to pay up
The era of free Netflix password sharing in the U.S. is coming to an end.
Netflix on Tuesday began emailing U.S. users who share passwords that either they or their nonhousehold members will need to pay up.
Users who share passwords must now pay an additional $7.99 a month for someone outside their household to stream through their accounts, the company said in the email, which Netflix shared in a blog post.
If the sharer doesn’t want to pay extra, the password borrower will have to pay for their own membership.
“Your Netflix account is for you and the people you live with — your household,” reads the Netflix email.
The crackdown comes as streamers are under pressure to become more profitable.
In the past, when streaming services were focused chiefly on subscriber growth, the sharing of passwords among friends and family was more tolerated. That’s now changed.
Netflix estimated last year that more than 100 million nonpaying households were using its service, a stat the company shared after a quarter of subscriber losses.
Password piracy and account sharing is expected to cost streamers and pay TV providers $12.5 billion in 2024, according to Parks Associates.
Account sharing and piracy cost streamers and pay TV providers $9.1 billion in lost revenue in 2019, according to the market research and consulting firm Parks Associates. That’s expected to increase to $12.5 billion in lost revenue by 2024.
Netflix has rolled out efforts to encourage nonpaying users to subscribe in other countries, including Costa Rica, New Zealand and Canada. The company said that it has been pleased with the results so far and that the customer reaction has been similar to that when price increases are announced.
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“We see an initial cancel reaction, and then we build out of that, both in terms of membership and revenue as borrowers sign up for their own Netflix accounts, and existing members purchase that extra member facility for folks that they want to share it with,” said Greg Peters, Netflix’s co-chief executive, in an earnings presentation in April.
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