Netflix’s password sharing crackdown is now rolling out to U.S. and other global subscribers after a delay. After seeing cancellations in markets where it had already introduced “paid sharing,” the streamer delayed the start date to the summer. Under the new rules, U.S. subscribers must either kick people off their Netflix account or pay $7.99 per month for an additional membership for those outside their main household.
Over the next few months, dozens of global markets will undergo similar changes.
The company provides tools to make this transition easier, including a way for current subscribers to view which devices are signed into their account and remove those that shouldn’t be, as well as tools to reset their password.
For those sharing a Netflix account, a “Transfer Profile” option can help them move their account information, including their viewing history and watchlist, to their own account.
Despite early cancellations, Netflix assured investors that the password crackdown would benefit its long-term growth and financial health.
In Netflix’s first-quarter earnings, co-CEO Greg Peters said the password crackdown in its first supported markets was similar to how subscribers reacted to price increases.
On the April earnings call, Peters told investors, “We see an initial cancellation reaction, and then we build out of that, both in terms of membership and revenue, as borrowers sign up for their own Netflix accounts and existing members purchase that extra member facility for folks that they want to share with. “So, first of all, it was a strong validation to see consistent results in these new countries because there are different market characteristics from each other and also different from the original Latin American rollout countries,” he said.
Netflix tested the feature in Latin American markets before adding Canada, New Zealand, Portugal, and Spain earlier this year. Today’s launch will expand its reach to Brazil, Bolivia, Belize, France, Germany, Iceland, Ireland, Italy, the Philippines, Malaysia, Israel, Thailand, Taiwan, Switzerland, Sweden, and others.
In Q1, the company may have delayed the crackdown to avoid further affecting net adds. The company reported a net increase of 1.75 million global subscribers last quarter, below Wall Street’s estimate of 3 million, reaching 232.5 million accounts globally.
During earnings, it said it would implement the password-sharing changes for U.S. subscribers “on or before” June 30. Netflix appears to have altered the schedule.
On its blog today, Netflix announced that it will email U.S. Netflix account sharers.
Netflix warns that one household can use one account. The post states, “Everyone living in that household can use Netflix wherever they are — at home, on the go, on holiday — and take advantage of new features like Transfer Profile and Manage Access and Devices.
“An update on sharing” simply lists options and directs members to documentation.
Netflix says it’s “now starting to roll out updates to sharing to countries around the world, including the U.S.”
In the U.S., where it faces increased competition for users’ time and money, Netflix has yet to see the results of a password crackdown.
The launch announcement is notable because HBO Max is becoming Max, a new service that combines HBO and Discovery+ content and roughly doubles the amount of programming. On June 27, Paramount+ will add Showtime. Disney also plans to merge Disney+ and Hulu. Some price increases come with more content for subscribers. Meanwhile, Netflix is charging more for the same.