Ahead of tomorrow’s earnings report, Netflix just announced a major shift for five countries. Starting in August, Netflix will begin charging $3/month to use an account outside the home on a connected TV device. The “Add a Home” feature will be available in Argentina, the Dominican Republic, El Salvador, Guatemala, and Honduras.
Earlier this year, Netflix began testing an “Add Extra Member” feature that charged an additional fee for members in Chile, Costa Rica, and Peru. Under that option, subscribers on Standard and Premium plans are able to add sub-accounts for up to two people they don’t live with. Both “sub-accounts” will come with their own profile, personalized recommendations, login, and password.
Also under that experiment, members of the Basic, Standard, and Premium tiers can allow people who share their account to transfer profile information either to a new account or an Extra Member sub-account. The viewing history, My List, and personalized recommendations will be transferred along with it, so nothing gets lost.
According to a report from Rest of World, the rollout of that feature has been frustrating for many users who are unclear what the restrictions mean. Much of the confusion seems to stem from whether a “household” is a physical structure or the members of an immediate family, no matter where they live.
What is the Netflix ‘Add a Home’ Feature?
Each Netflix account in Argentina, the Dominican Republic, El Salvador, Guatemala, and Honduras gets one home where users can access the service. If you’d like to add the service in additional homes, you’ll face the $3 upcharge.
Members on the Basic plan can add one extra home, Standard subscribers can add two more homes, and Premium members can hook up to three additional homes.
Users will still be able to watch outside the home on a tablet, laptop, or mobile phone, so the restriction appears to be limited to smart TVs, gaming consoles, or streaming sticks.
Why is Netflix Doing This?
As user growth slows for Netflix, the company is forced to try to find ways to generate more revenue. Password sharing is rampant, with as many as 45% of subscribers sharing their accounts.
One study suggests 13% of U.S. Netflix users would abandon the service altogether if forced to pay more to share the service. However, this crackdown could work — another study suggests 2/3 of Netflix freeloaders may be willing to pay for their own account.
Netflix leaders appear to be willing to lose some viewers if enough freeloaders finally crack open their wallets. It’s a high-stakes gamble for a streaming service facing its toughest year yet.
Netflix
Netflix is a subscription video streaming service that includes on-demand access to 3,000+ movies, 2,000+ TV Shows, and Netflix Originals like Stranger Things, Squid Game, The Crown, Tiger King, and Bridgerton. They are constantly adding new shows and movies. Some of their Academy Award-winning exclusives include Roma, Marriage Story, Mank, and Ma Rainey’s Black Bottom.