- Netflix told shareholders it would launch a paid sharing account by the end of March.
- That’s because it tries to prevent users from sharing their password with anyone outside of their household.
- A trial period follows in Latin America, where it costs up to $3 per month to add an additional member.
You have less than 10 weeks to continue sharing your Netflix account with people outside of your household before the company rolls out a paid system.
Netflix first hinted at a crackdown on password sharing last July after it reported its first subscriber loss in over a decade — a total of 200,000 users — in the first quarter of 2022.
In Sunday’s letter to shareholders, Netflix said it would launch a paid sharing system in the first quarter of this year. This means that you will no longer be able to give out your password free of charge by the end of March at the latest.
According to Netflix, account sharing affects over 100 million homes, “undermining our long-term ability to invest in and improve Netflix.” It added that while their terms of service already limit account usage to a single household, “we recognize this is a change for members sharing their account more broadly.”
“As we roll out paid sharing, members in many countries will also have the option to pay extra if they want to share Netflix with people they don’t live with,” the letter added. Subscribers can also transfer a user profile to a new account.
Paid sharing has already been tested in Costa Rica, Chile and Peru, where it cost $2 to $3 to add an additional member account for someone living outside the household. Peruvian Netflix subscribers told Rest of World that the policy was confusing and they were not subject to any enforcement of the rule.
The letter to shareholders states that some Latin American users have canceled their subscriptions as a result of the change. As a result, Netflix expects short-term engagement to fall, but if people who have borrowed accounts start subscribing to themselves, overall earnings should improve.
This new subscription follows the launch in November of an ad-supported tier that can watch up to five commercials per hour. At $6.99 per month, Basic with Ads costs $3 less than the cheapest ad-free tier.
Netflix didn’t immediately respond to Insider’s request for comment.