Netflix’s crackdown on password sharing is now starting to roll out to US subscribers and other global markets, following a delayed launch. The streamer originally planned to introduce “paid sharing” for US subscribers in the first quarter of this year, but pushed back the launch date to the summer, after seeing cancellations in markets where it had already implemented the changes. Under the new rules, US subscribers will have to kick people off their Netflix accounts or pay $7.99/month for an additional membership for those outside their main household.
Similar changes will be rolled out to dozens of global markets in the coming weeks and months.
The company offers tools to make this transition easier, including a way for current subscribers to see which devices are logged into their account and remove devices that shouldn’t have access, as well as tools to reset their passwords.
Those sharing someone else’s Netflix account can make the switch to their own account via the “Transfer Profile” option that allows them to move their existing account information, including their viewing history and watchlist.
The feature was met with strong backlash from consumers, but Netflix assured investors that despite some early cancellations, it believes the crackdown on passwords will be beneficial to its long-term growth as a company and its financial health.
For example, Greg Peters, co-CEO of Netflix, said during its first quarter results that the results of the password crackdown in the first supported markets were very similar to how subscribers reacted to price increases.
“We’re seeing an initial cancellation response and then we’re building on that, both in terms of membership and revenue, as borrowers sign up for their own Netflix accounts and existing members buy those additional member facility for people they want to share with,” Peters told investors during the earning round in April. “So first of all it was strong validation to see consistent results in these new countries because there are several market characteristics that are different from each other and also different from the original Latin American rollout countries,” he added.
Netflix had first started testing the feature in Latin American markets before expanding access to Canada, New Zealand, Portugal and Spain earlier this year. With today’s launch, it will reach a wider range of global markets, including Brazil, Bolivia, Belize, France, Germany, Iceland, Ireland, Italy, the Philippines, Malaysia, Israel, Thailand, Taiwan, Switzerland, Sweden and others.
The company may have postponed its Q1 crackdown as it did not want to impact its net additions any further. The company reported a net increase of 1.75 million global subscribers in the quarter last quarter, which was down below Wall Street’s estimates of 3 million, with a total of 232.5 million accounts worldwide.
It also shared during earnings that it planned to roll out the password sharing changes to US subscribers “on or before” June 30. It looks like Netflix has been able to push the timing up a bit.
Netflix today announced on its blog that it sends an email to the members in the US who share their Netflix account.
“A Netflix account is for use by one household,” the company warns. “Anyone living in that household can use Netflix wherever they are — at home, on the road, on vacation — and take advantage of new features like Transfer Profile and Manage Access and Devices,” the post reads.
The email itself, titled “An Update on Sharing,” simply describes the options available and directs members to further documentation if needed.
Image Credits: Netflix
In an email sent to the press, Netflix clarifies that the email is being sent because it “is now starting to roll out sharing updates to countries around the world, including the US.”
While previous tests indicated that Netflix could recover from a password crackdown, it has yet to see the results of this in its largest and most important market, the US, where it faces increased competition for users’ time and money.
The timing of the launch announcement is noteworthy, as HBO Max today turns into Max, a new service that combines HBO and Discovery+ content under one roof, roughly doubling the amount of programming available. Next month, on June 27, Paramount+ will also add Showtime to its service. Meanwhile, Disney said it plans to combine Disney+ and Hulu into one app. While some changes may come with price increases, they also deliver more content to subscribers. Netflix, meanwhile, is asking viewers to pay more for the same amount.
Updated at 4:45 PM ET with a longer list of countries where password sharing crackdowns are being rolled out.
