The days are numbered of sharing one Netflix account among friends. Netflix will officially start charging for password sharing by the start of the year 2023.
Netflix last week said that it is moving ahead with its plan to monetize account sharing. Subscribers will be made to pay an additional fee for sharing their accounts. It would introduce a system that adds fees for ‘subaccounts’ used by any extra member outside one household.
Pilot Testing In Latin American Countries
Netflix started experimenting with the extra charge for password sharing in some countries- Costa Rica, Peru, and Chile in March this year. It faced huge backlash for this pilot password-sharing monetizing program.
According to Time, “Subscribers in the three countries were able to add up two extra members to their accounts for additional$2.99,2,380Chilean Peros, and 7.9 Peruvian Sol respectively each per month” The company has not confirmed how much it is planning to charge in other countries.
New Feature of Profile Transfer
The crackdown has already begun with the introduction of the Profile Transfer Feature. The company assured that people borrowing other accounts will be given the ability to transfer their profile information like viewing history and personalized recommendations to their own account.
The new account can be added to someone else’s account having a Standard or Premium subscription plan as an extra member or they can sign up for their own membership. The option to switch off Profile transfer can be availed at any time and the duplicated profile cannot be automatically removed from the original account.
Reason Behind The Step
Netflix in its first quarter of 2022, after losing subscribers for the first time in ten years, said in its April newsletter that monetizing shared accounts would be a big opportunity for revenue growth. In March, the company said that the huge loss of revenue due to password sharing has affected the company’s ability to invest in great new TV and films.
Facing the heat of competition due to various other competing OTT platforms, Netflix is working on strategies to hold on to their subscriptions. Netflix also plans to launch cheaper subscriptions that are ad-supported, from next month. The company feels that the feature of Profile Transfer will be very popular among password sharers in conjunction with the new ad-supported subscription plan.
In its third-quarter earnings report, Netflix said that it added 2.4 million subscribers, higher than the estimated projection of 1 million in the previous quarter. It also forecasts a gain of 4.5 million subscribers for the fourth quarter because of its monetizing policies.
The company after losses has come back to what it is in the market for – profit and competition. But the primary question arises- In the name of competition, is burdening the audience the right strategy?
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