How Users Respond to Netflix’s Password Sharing Rules


Netflix faced immediate backlash earlier this month after announcing it would start charging some subscribers additional fees to share their account with users outside their household. Some users, especially younger ones, wonder how the change will affect their own bottom line.

“Business-wise, I understand Netflix’s decision. But as a user, I find it frustrating,” says Vel Mensah, a 33-year-old Netflix user from New Jersey. The outcry on Twitter was similar, with some say that they wouldn’t use Netflix at all without being able to share an account.

Netflix has turned to price increases to raise more money amid reports of slowing subscriber growth. The loss of revenue from password sharing has affected the company’s ability to “invest in new TV shows and movies”, he said.

But it could risk alienating much of its base of more than 200 million paying subscribers if it begins to strictly enforce anti-sharing policies. Netflix is ​​most popular in the United States with younger consumers, who support password sharing far more than older generations: A 2021 survey by tech research site Comparitech found that millennials and Gen Zs are about twice as likely as Gen Xers and Baby Boomers to have both. share their streaming passwords with non-paying friends and family members and accept free access to others’ accounts themselves.

Here’s what you need to know about the new rules.

Who is affected by Netflix’s new limits on password sharing?

The streaming giant said it is currently only experimenting with charging for password sharing in Chile, Costa Rica and Peru. Even then, users would have to sign up to be subject to the rules, a Netflix spokesperson told TIME.

However, users in the United States and other parts of the world seemed to understand that the news meant they could soon face a tougher crackdown. Mensah said the rule leaves her “wondering what’s next.”

What are the pricing and password sharing rules in the US right now?

Netflix subscribers in the US can use their account on one, two or four screens at a time and prices reflect the number of screens available, ranging from $9.99 to $19.99. When Netflix launched its streaming service in 2007, subscribers received one hour of streaming credit for every dollar they paid for Netflix’s DVD rental service. So if they paid for the $17.99 rental plan (allowing them to rent three DVDs simultaneously), they could also stream 18 hours of content per month. In 2010, Netflix launched its first streaming-only subscription plan for $7.99 per month.

Prices for all plans have risen steadily over the past few years, with the latest increase in January. Plan prices now range between $9.99 and $19.99, with the most expensive plan allowing streaming to up to 4 screens. All users with access to a master account are assumed to be from the same household, although they may be watching on different screens. However, if you share a password with someone who lives elsewhere, Netflix takes no action against you at this time. This is what worries users, especially as prices rise.

Alex Parrella, a 33-year-old subscriber from Massachusetts, says he’s starting to wonder if he’s getting enough value from Netflix. “Yes [prices] keep climbing, I’m not sure it will be worth it to me,” he said.

What about sharing passwords in Chile, Costa Rica, and Peru, the places affected by the new rules?

In the coming weeks, Netflix will allow subscribers in Chile, Costa Rica and Peru who share their password outside their household to choose between two new options. They can either start paying a fee to add up to two “additional member” accounts to their subscription, or allow users outside their household to transfer their existing profile information, including viewing history and personalized recommendations. , to their own new account. . Even this change is being introduced with caution: These features are optional at this time, meaning subscribers won’t be automatically charged for sharing, the Netflix spokesperson said.

Netflix said in its statement, “We will work to understand the usefulness of these two features for members in these three countries before making changes elsewhere in the world.”

Subscriber Justin Balich, 37, says even the company’s piloting of a crackdown on password sharing doesn’t bode well. If a user is paying for multiple people to connect, they shouldn’t need to be under the same roof, he says: “If one of those devices belongs to your best friend, it should be up to you.”

The bigger picture

Netflix’s announcement is prompting some users to take a closer look at which streaming services actually offer them enough value. As studio-owned services like Paramount+ and Peacock pull their content from juggernauts like Netflix and Hulu to build their own streaming libraries, streaming of popular TV shows and movies is on the rise. This move coincided with Netflix and Hulu raising their prices, creating a dilemma for users on tighter budgets. Someone who subscribes to five popular services like Netflix, Hulu, Amazon Prime Video, HBO Max, and Disney+ would pay between $43 and $65 per month, which is similar to the average cost of a starter cable bill.

For streaming services, on the other hand, it can be difficult to balance cost increases with customer happiness. And Netflix, for its part, is under the scrutiny of users as it tries to get it right.

Mensah says, “Netflix has to be careful not to take advantage of its established following.”

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Write to Megan McCluskey at megan.mccluskey@time.com.




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