Image credit: AaronP/Bauer-Griffin/GC Images/Getty Images
Netflix’s crackdown on password sharing is now starting to roll out to US subscribers and other global markets, after a delayed launch. The streamer had originally planned to introduce “paid sharing” to US subscribers in the first quarter of this year, but pushed the launch date back to the summer, after seeing cancellations in markets where it had already launched the changes. Under the new rules, US subscribers will either have to kick people off their Netflix account or pay $7.99/month for an additional membership for those outside the main household.
The company offers tools to make this transition easier, including a way for current subscribers to see which devices are signed into their account and remove those that shouldn’t have access, as well as password reset tools.
For those who share someone else’s Netflix account, they can make the transition to their own account through a “Transfer Profile” option that will help them migrate their existing account information, including watch history and watchlist.
The feature has been met with a lot of backlash from consumers, but Netflix assured investors that despite some early cancellations, it believes the password crackdown will be beneficial to its long-term growth as a business and to its financial health.
During first-quarter earnings, for example, Netflix co-CEO Greg Peters said 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 off of that, both in terms of membership and revenue as borrowers sign up for their own Netflix accounts and existing members purchase the additional membership facility for people they want to share with,” Peters told investors at the earnings call in April. “So, firstly, it was a strong validation to see consistent results in these new countries, because there are different 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 global launch, it will reach a wider set of global markets, including Brazil, Bolivia, Belize, France, Germany, Iceland, Ireland, Italy, Philippines, Malaysia, Israel, Thailand, Taiwan, Switzerland, Sweden and others. In total, dozens of global markets will start seeing this feature in the coming weeks and months, Netflix says.
The company in Q1 had reported a net increase of 1.75 million global subscribers in the quarter, falling short of Wall Street estimates of 3 million, reaching a total of 232.5 million accounts globally.
It also shared during the earnings call that it planned to roll out the password sharing changes to US subscribers on or before June 30.
Today, Netflix announced on its blog that it is sending out an email to those members in the US who share their Netflix account.
“One Netflix account is for one household use,” the company advises. “Everyone in that household can use Netflix wherever they are — at home, on the go, on vacation — and take advantage of new features like Transfer Profile and Manage Access and Devices,” the post said.
The email itself, titled “An Update on Sharing,” only describes the available options and points members to additional help documentation, if needed.
In an email sent to the press, Netflix clarifies that the email is being sent because it is “now beginning to roll out updates for sharing to countries around the world, including the United States”
Although previous tests indicated that Netflix can bounce back from a password crackdown, it has yet to see the results of doing so in its biggest and most important market, the US, where it faces increased competition for users’ time and money.
The timing of the launch announcement is notable, as today HBO Max transforms into Max, a new service that combines HBO and Discovery+ content under one roof. Next month, on June 27, Paramount+ will also add Showtime to its service.