Entertainment

Netflix Wants You to Pay for Your Freeloading Friends

Time to call your ex-boyfriend’s cousin’s mother to let her know that her free access to your Netflix account is coming to an end. The streaming giant is going to start cracking down on password sharing early next year.

Netflix did warn you this was coming. In April, as the company was losing subscribers and its stock plummeted, executives revealed that, by their own estimate, around 30 million households in the US and Canada were accessing Netflix through shared passwords. Now, after testing a handful of approaches to curb account sharing, they’ve announced new features that they hope will encourage people to start paying up.

“We’re trying to come up with a range of options that supports customer choice,” Netflix chief product officer Greg Peters said Tuesday during the company’s quarterly business update for investors. 

Netflix’s first solution is for moochers who are ready to take the plunge and pay for their own subscription—perhaps even the just-announced cheaper, ad-supported membership plan that’s coming soon. Anyone who has been watching Netflix programming through a personalized profile on someone else’s account can now transfer that profile to their own account. The feature, which began rolling out to users on Monday, helps preserve a person’s data, like their settings and viewing history, so the Netflix algorithm will know to continue serving up, say, new episodes of Selling Sunset or the latest teen rom-com.

The streamer will also give its subscribers the opportunity to be charitable with their freeloading friends and family. Beginning next year, members will have the option to pay a little bit more money to add an “extra member” to their plans. The company hasn’t said how much it will cost for subscribers in the US to add these sub-accounts to their existing plans, but in the countries where it tested the feature earlier this year, it cost less than $3 per month to add two additional people.

Netflix essentially wants an account to only be available for people who live together in a single household. Each account supports up to five profiles, so every member of the family can personalize their viewing experience. But family or friends who live outside the household will either need to sign up for their own account or be added as an “extra member.” How exactly Netflix will crack down on subscribers who share accounts outside of their households remains to be seen, but Rest of World reported this spring that in Peru, where Netflix tested the “extra member” feature, users were asked to validate their accounts. 

Netflix co-CEO Reed Hastings once embraced password sharing as a sign that the streaming service was popular and its content was in demand. “We love people sharing Netflix, whether they’re two people on a couch or 10 people on a couch,” he said in 2016, back when streaming was still considered a relatively novel way to watch film and TV programming. Times have changed: Now, Netflix competes for subscribers with nearly a dozen rival streaming platforms. Though Netflix remains the largest subscription streaming service with 223 million global members, it has shown signs of faltering. During the first six months of the year, it lost 1.17 million subscribers.

“Over the last 15 years, we’ve worked hard to build a streaming service that’s easy to use, including for people who travel or live together,” reads a blog post published over the summer that explained why Netflix was testing “paid sharing” features. “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.”

Netflix has bounced back, adding 2.41 million subscribers during the three months from July to September, thanks in large part to a strong release schedule that included Ryan Murphy serial killer drama Dahmer—Monster: The Jeffrey Dahmer Story, action movie The Gray Man, and new episodes of Stranger Things—all of which have become some of the service’s most popular titles of all time. Releasing must-watch programming remains the most reliable way to attract new subscribers, but if Netflix can get even a small percentage of freeloaders to start paying up, that’ll help, too.

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