Netflix’s Password-Sharing Crackdown Is Happening: What to Know – CNET [CNET]

Netflix has started charging fees in more countries for account sharing beyond a single household — and it’s pricier than it was during tests.

The end of free Netflix password sharing is upon us: The streaming service has begun rolling out a system that charges fees for “extra member” subaccounts when people outside one household use the same membership, starting Wednesday in Canada, New Zealand, Portugal and Spain. More countries, including the US, are expected to get the new charges as the initiative rolls out globally. 

For years, Netflix was relatively lax about password sharing. Netflix tweeted “love is sharing a password” once, and founder Reed Hastings said in 2016 that he loves when people share Netflix. But last year, Netflix started testing ways to “monetize account sharing” after recording its deepest subscriber losses in a decade. In addition to the password-sharing fees, Netflix has also launched cheaper subscriptions supported by advertising, hoping to entice more people to pay for Netflix if they don’t have to pay quite as much. 

Netflix’s dominance of streaming video — not to mention years of unflagging subscriber growth — pushed nearly all of Hollywood’s major media companies to pour billions of dollars into their own streaming operations. These so-called streaming wars brought about a wave of new services, including Disney Plus, HBO Max, Peacock, Paramount Plus and Apple TV Plus. This flood of streaming options has complicated how many services you must use (and, often, pay for) to watch your favorite shows and movies online. 

Now, under pressure from the intensifying competition, Netflix is pursuing strategies it had dismissed for years, including an account-sharing crackdown. 

How much will ‘paid account sharing’ cost me? 

The company hasn’t specified prices for these new charges in the US yet, but our best guess is that extra members will cost $7.50 a month. 

Prices so far vary by country, and the latest countries hit by fees are being asked to pay more than was charged in the initial tests — that is, the fees got pricier in Netflix’s official rollout. 

In Chile, Costa Rica and Peru, where these fees were first tested, the average charge for an extra member subaccount was priced at roughly 25% the cost of a Standard plan in each country, on average. That means if Netflix were to stick to that practice, then each extra member subaccount in the US would cost between about $3.50 and $4 per month. 

But Wednesday, Netflix launched the fees in the first wave of countries that are part of its official worldwide rollout of account sharing. And in these countries — Canada, New Zealand, Portugal and Spain — the prices for extra members are meaningfully higher, sometimes twice as much as a percentage. On average, Netflix set the fee for extra members in the first-wave countries at 43% the price of a Standard plan in each country. 

And Canada, which is the market most closely linked to the US, is being charged the most for subaccounts as measured by percentage: Each extra member is nearly half the cost of a Standard plan there. 

If Netflix applies the Canadian practice to the US, then each extra member subaccount would be about $7.50.

(By comparison, Netflix’s cheapest tier in the US — Basic With Ads — is $7 a month. And in countries where Basic With Ads tier is available and account-sharing just rolled out, the pricing relationship is consistent there too: The price for extra members is a bit higher than you’d pay to watch Netflix with commercials through Basic With Ads.)

Who has to pay the password-sharing fee? 

Extra members have their own account and password, but their extra member “slot” is paid for by the account owner who invited them to join the Netflix existing membership.

Since the model creates separate log-in credentials, it isn’t really password sharing anymore. (It may be why Netflix uses the term “paid account sharing.”) But the main account holder will be the person paying for both the regular subscription and the new subaccount fee. 

When will Netflix start charging for password sharing in my country? 

Netflix said last month that it’ll start launching the account-sharing structure more widely before the end of March. On Wednesday, it launched the scheme in Canada, New Zealand, Portugal and Spain. In January, Netflix indicated that a full, global rollout will take a couple of quarters. 

Netflix hasn’t specified a timeline for when other countries will get the fees.  

“We’re ready to roll those out later this quarter. We’ll stagger that a bit as we work through sets of countries,” Netflix co-CEO Greg Peters said last month, referring to the first quarter of 2023. “But we’ll really see that happen over the next couple of quarters.”

How will Netflix enforce it? Will it block my account if I share?

Netflix’s enforcement varied during the tests in Latin America, according to one report. 

But on Wednesday, Netflix updated help-center pages tailored for the countries where the fees are active, and these pages outline a system that will likely reflect the full rollout of these policies worldwide. 

This system hinges on your account’s “primary location” and the devices that connect to the Wi-Fi network there. Netflix help-center pages say your primary location is the main place you watch Netflix; you can set this primary location through a series of steps in the Netflix app on a TV. A Netflix spokeswoman said that members may get an “interstitial” message to set their primary location — basically, a pop-up prompt on your TV’s Netflix app. 

Netflix’s help-center pages also say that if a primary location hasn’t been set, the service will automatically set one based on IP address, device IDs and account activity. 

But Netflix also specifies that it doesn’t collect GPS data to to determine precise physical location of your devices. “We use the IP address from the Netflix device or app to assume its general location (such as city, state/province, and postal code),” the policies state. “For example, your primary location may be displayed as ‘near city, state/province.”http://www.cnet.com/”

You can also update or change your primary location from a TV anytime, and the help-center pages add that if you don’t watch Netflix on a TV (or don’t have one), you do not need to set a primary location for your account. 

Previously, Netflix’s help-center pages included language about “trusted devices,” which were any device that logged in to Netflix on your primary location’s Wi-Fi network at least once every 31 days. Netflix no longer appears to have the “trusted device” language in its account-sharing policies anymore, but the 31-day element seems to be persisting. Netflix will distinguish between devices that are accessing Netflix while traveling (which is fine) versus those that are watching Netflix outside that primary location because the viewers actually live somewhere else (which is not). Logging in to Netflix on the primary location’s WiFi network at least once every 31 days will, essentially, indicate that the device is merely traveling when it accesses the service from other locations, according to a spokeswoman. 

Also previously, Netflix’s help-center pages also included language about device-specific blocks, as in: If a device persistently accesses an account outside the primary location, then it may be blocked from watching Netflix. The help-center pages now appear to have removed references to device blocks, so it’s unclear how Netflix will be enforcing the restrictions against watching Netflix from a different household. 

Did Netflix accidentally leak information and then pull it down?

Sort of. 

Netflix’s “help center” customer service site has country-specific pages. Because Netflix’s prices, tiers and policies can vary between countries, you can toggle a help-center’s page between different countries to show what’s applicable in each particular market. So, for example, since Netflix was testing account-sharing fees in Chile, Costa Rica and Peru for months, you could go to Chilean help-center pages to see how Netflix was characterizing its rules for account sharing there. 

Early in February, Netflix added new information to help-center pages about account sharing, and those new details remained up on pages for Chile, Costa Rica and Peru. But Netflix also posted similar information on help-center pages for other countries too, ones that hadn’t launched the initiative yet. When Netflix realized those pages for other countries were live in error, it pulled them down. 

However, since then, Netflix has revamped the relevant help-center pages for all the countries with account-sharing with different info. 

Can I share a low-price Basic account with extra members? 

No — at least, not in any of the countries where these fees have been activated. These “extra member” fees are available only on its Standard and Premium plans, which both allow more than one simultaneous stream. Standard plans can have one extra member, and Premium plans can have two. 

So far, Netflix hasn’t offered an option for these “extra member” fees on its Basic plans, which now are available in some countries as two options: a pricier Basic account that’s ad-free and a cheaper Basic With Ads. In the US, the ad-free Basic tier is $10 per month, and the ad-supported level is $7 a month. (For context, a US Standard plan is $15.50 and Premium is $20.)

Both these Basic plans limit your viewing to a single simultaneous stream, which makes account-sharing functionally difficult.

Do extra member subaccounts have any limitations? 

Yes, they do. 

Extra member subaccounts get only one simultaneous stream, and downloads can be stored on only one phone or tablet at a time. 

They also can have only one profile, which can be new or transferred from the account owner who invited the extra member. While this single extra-member profile can set different maturity ratings, it can’t be a Kids profile, which have a look and feel designed for children. 

And extra members must create their subaccount in the same country as the main account owner. (But once activated, the extra member can watch from anywhere.)

Will I lose all my recommendations if I get kicked off someone else’s account or have to open a subaccount? 

Netflix has created a profile-transfer feature, which it launched the day before revealing its plans for a wider rollout of the account-sharing fees. Profile transfer has been a key component of the password-sharing fees tested in Chile, Costa Rica and Peru. This feature lets the watch history and recommendations of a profile created on a shared Netflix account be transferred to a new, independent account. This new account can then be added to somebody else’s Standard or Premium subscription plan as an extra member account (for a fee), or it can be used when signing up for a separate membership (which, of course, also requires payment). 

However, you can’t currently transfer a Kids profile to a new, independent account. (You can, however, simply turn off the Kids experience for a profile, which should make it eligible for transfer.)

How did Netflix come up with these fees? 

As noted above, the password-sharing fee system that Netflix will roll out appears to be modeled on a scheme the company has been testing in Chile, Costa Rica and Peru since March. 

Netflix tested a different concept elsewhere in Latin America. In July, the company said it was trying out a method in Argentina, the Dominican Republic, El Salvador, Guatemala and Honduras that established an account’s primary residence as the “home” for the membership. If the service detected streaming at any additional households for more than two weeks, it would prompt the account holder to set up — and pay for — additional “homes,” with a limit on how many additional homes you can add, depending on how much you’re already paying for Netflix. 

But Netflix appears to be dropping this “additional homes” model in favor of the other one it tested in Chile, Costa Rica and Peru.