Netflix targets households, not users, with new password-sharing strategy

Netflix is switching up the way it tackles password-sharing freeloaders. 

Having already launched an “add extra member” surcharge for subscribers in Chile, Costa Rica and Peru, the streaming service has begun trialing an alternative “add a home” feature in Argentina, the Dominican Republic, El Salvador, Guatemala and Honduras. 

The new system grants bill-paying customers the option of adding entire households – rather than individual users – to their existing monthly subscriptions for a small fee (currently equivalent to $2.99 / £2.50 / AU$4). In a blog post (opens in new tab) announcing the move, Netflix said members on its basic plan can add one extra home, standard up to two extra and premium up to three extra.

Those subscribers who do opt to purchase these additional homes will be able to control where their accounts are being used – and remove homes at any time – through a “manage homes” feature in Netflix settings. 

Netflix executives have been vocal about their plans to expand password-sharing surcharges to major global markets like the US and UK in the “short to mid-term”, though it’s not yet clear which of the two systems trialed so far will make the cut worldwide. 

Interestingly, the “add extra member” trial in Chile, Costa Rica and Peru has reportedly encountered difficulties in its initial months, with test subjects crying foul over the way password-sharing fees have been announced, policed and implemented. 

According to a recent survey (opens in new tab), many of those involved – in Peru, at least – have been left confused by Netflix’s loose definition of “household” and frustrated by a lack of clarity over whether they qualify for the additional fee. 

It makes sense, then, that the streamer is testing an entirely new (and potentially simpler) system in Argentina, the Dominican Republic, El Salvador, Guatemala and Honduras.

As for why Netflix is cracking down on account-sharing freeloaders, the streamer says (opens in new tab) that “widespread account sharing between households undermines [its] long-term ability to invest in and improve [the Netflix] service.” Company executives estimate that more than 100 million non-paying households exist worldwide, with over 30 million in the US and Canada alone. 

Given the streamer’s recent subscriber losses, too, it’s become more important than ever for Netflix to maximize its revenue potential. In any case, the company’s second-quarter earnings call is set to take place later today (June 19), so we may learn more about how and when these password-sharing fees will arrive for Netflix subscribers across the globe.

If indeed they do in the not-too-distant future, would you prefer to pay a surcharge per househould, or per user? Vote in our Twitter poll below: