Last week, media tech giant Netflix announced a new initiative to crack down on password sharing for users based in some countries located in Latin America.
This new test will take place on August 22 and includes a new “add a home” feature for primary account holders. Once a primary location is set, anyone logging into the account outside the home will have to pay an extra fee.
In Latin America, this fee will be 219 pesos — $2.99 USD — a month additional. Affected countries include the Dominican Republic, Honduras, Guatemala, El Salvador, and Argentina.
Users who subscribe to the ‘Basic’ plan can add up to one additional home to their accounts. Users who subscribe to a ‘Standard’ plan will be able to add up to two additional homes, totaling three for the account. Last, users who subscribe to the ‘Premium’ plan will be able to add three additional homes, totaling four for the account.
Netflix’s Director of Growth Product Innovation, Chengyi Long explained, “It’s great that our members love Netflix movies and TV shows so much they want to share them more broadly, but today’s widespread account sharing between households undermines our long-term ability to invest in and improve our service.”
According to Netflix’s site, they have taken travel into consideration with this new “add a home” feature rollout. Traveling outside the home will allow the primary user to stream content on their phone, tablet, or laptop at no additional fee.
This is not the first test of its kind for Netflix. The tech giant did similar testing in Chile, Costa Rica, and Peru earlier this year, according to TechCrunch. Netflix clarified that this type of testing would need to continue to be monitored and iterated “for roughly a year or so, to make sure it gets the balance right” for users sharing their accounts.
This new test comes partly from Netflix’s loss of over 200,000 subscribers in the first quarter of 2022. In addition to homing in on shared accounts to make up for some reduced cash flow, Netflix also announced they would launch a new plan with ads later this year at a lower price.
CEO and Founder Reed Hastings said of the new ad plan that Netflix does not have “any doubt that it works.” Streaming competitors Disney and Hulu have had ad plans for subscribers from the start.
Netflix held out on ads for the last two-plus decades. Hastings was vocal about being against ads initially. “I’ve been against the complexity of advertising and a big fan of the simplicity of subscription [to our streaming services]. But as much as I’m a fan of that, I’m a bigger fan of consumer choice,” he stated.
Hastings framed the new plan option as a way to allow more people to watch content at lower costs. Netflix has acknowledged the saturation of the streaming media space with giant competitors like Paramount, Apple TV, Amazon Prime Video, Hulu, HBOMAX, and more as a part of the reason for their loss of subscribers.
Netflix also “noted that more than 100 million users watch [the service] by borrowing credentials from others” and hopes this new plan will help compensate for the losses resulting from that sharing.