Netflix to Charge Extra Fee for Shared Accounts

Netflix is rolling out its plan to charge an extra fee for shared accounts globally after testing it in select markets earlier this year. The move is meant to curb password sharing with people who live outside a subscriber's household. Netflix has long acknowledged that people share their passwords, but the company has sought to put a clamp on the practice amid subscriber losses earlier this year.

In a letter to investors, while sharing third-quarter 2022 results, Netflix said it came up with a "thoughtful approach to monetize" account sharing. The plan could roll out "more broadly" in early 2023. The system will allow Netflix subscribers to create "sub accounts" or "extra members." Each sub-account gets its own log-in, profile, and personal recommendations, reports USA Today.

Netflix did not say how much extra this will cost the main account holder. The streamer started testing this feature in Chile, Costa Rica, and Peru, where it cost about the equivalent of $2.99 in each country. The main subscriber pays this fee in addition to the Standard or Premium subscription.

The company also announced plans to roll out its "Transfer Profile" feature around the world, beginning immediately. This allows you to transfer your profile information, like personalized recommendations, viewing history, and watch lists, to another member. This is another feature meant to encourage people using someone else's password to create their own account since they can retain their own information. This feature was also tested in Chile, Costa Rica, and Peru earlier this year.

"We've landed on a thoughtful approach to monetizing account sharing and we'll begin rolling this out more broadly starting in early 2023," Netflix's letter to investors reads. "After listening to consumer feedback, we are going to offer the ability for borrowers to transfer their Netflix profile into their own account, and for sharers to manage their devices more easily and to create sub-accounts ('extra member') if they want to pay for family or friends. In countries with our lower-priced ad-supported plan, we expect the profile transfer option for borrowers to be especially popular."

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Netflix executives publicly acknowledged password sharing for a long time. However, it was not until the company started shedding subscribers due to its increased prices that it began making moves to curb the practice or at least, as they said this week, "monetize" it. Netflix is also facing growing competition from other streamers, particularly Disney+.

The company did have some good news on Tuesday. It added 2.4 million subscribers during its third quarter of 2022, which was more than expected. This was still much fewer than the same quarter in 2021 though, when it added 4.4 million new subscribers. Netflix hopes to add another 4.5 million new subscribers in the fourth quarter of 2022, half of what it gained during the same time in 2021.