Netflix has been warning for months that it would begin cracking down on password sharing in the U.S. after rolling out changes in multiple countries, including Canada.
Company executives gave yet another hint on how soon Netflix will tackle password sharing in the U.S., albeit later than anticipated.
Netflix has been exploring ways to crack down on password sharing, including a log-in verification process in 2021, and the use of sub-accounts for people living outside the account owner’s home in 2022, which was tested in Chile, Costa Rica and Peru. In early February, Netflix expanded its paid account sharing into Canada, New Zealand, Portugal, and Spain.
Some version of paid password sharing was expected to come to the U.S. by the end of quarter one – a date that has since passed.
During a first-quarter earnings call on Tuesday, Netflix co-CEO and director Gregory Peters said that recent paid account sharing rollouts “have gone well” and that the company has “learned from this last set of launches about some improvements we can do.”
He went on to acknowledge the delay of the U.S. rollout – “it was better to take a little bit of extra time – and said a “new improved version” of paid password sharing will be launched broadly in quarter two.
That means by the end of June, sharing a Netflix account will be more complicated than just sharing a login with someone.
It isn’t clear yet exactly how paid password sharing will work in the U.S.
In other countries, Netflix has introduced the aforementioned sub accounts, which allow account holders with a standard or premium plan to add up to two people who live outside their household to their plan for an extra, smaller fee. Netflix hasn’t said how much that fee could be in the U.S.
When it introduced sub accounts in Chile last year, Netflix charged $2.99 for the extra member. In Canada, Netflix will charge CAD$7.99, which is about $5.95 in U.S. dollars.
Netflix also knows users may leave amid the shift to paid sharing. In a letter to shareholders, executives noted that some in Latin America canceled their accounts amid the password-sharing crackdown but new member registration eventually increased with the use of sub accounts and new users.
Peters said Tuesday that while the company knows some U.S. users “won’t convert” when paid sharing begins, those users will “represent essentially a pool of people that we can then go after with improving our offering” with movies, series, and games.
“It’s worth noting that this will not be a universally popular move, so there will be current members that are unhappy with this move. We’ll see a bit of a cancel reaction to that,” Peters said in a conference call with investors in January. “We think of this as similar to what we see when we raise prices.”
Since rolling out changes in Canada and three other countries, Netflix hasn’t said what actions it will take if subscribers continue to share accounts outside their households.
Also on Tuesday, Netflix announced it will no longer send DVDs by mail, ending the service after 25 years.