Netflix Inc. asks customers in five Latin American countries to pay a fee to use their account at an additional location. This is a test that the company hopes will bring in additional revenue.
The company announced Monday that customers in Argentina, El Salvador and Guatemala will have to pay an additional fee if they use their account for more than two consecutive weeks away from their primary residence.
The company said Monday that this will not affect Netflix’s mobile apps, such as tablets, smartphones, or laptops. It also won’t impact vacationers. The cost of the additional home in Argentina will be 219 pesos ($1.70), and $2.99 for those in other countries.
Netflix claims that over 100 million households use accounts purchased by others. It blames password sharing for the company’s slow subscriber growth. It lost 200,000 customers during the first quarter and predicted it would lose 2,000,000 in the second. Investors are worried that the streaming business may be in serious trouble, and this has caused its share price to plummet by more than 65%.
“Today’s widespread household account sharing undermines our long-term ability to invest and improve our service,” Chengyi Long (director of production innovation) stated in an article.
Latin America has seen password sharing spikes. Netflix is currently conducting two tests to determine if users will pay to access the service.
Netflix is trying to restrict sharing without penalizing people who pay Netflix or alienating customers. Some customers have been concerned that they might lose their access to their accounts because the company has attempted to portray it as a crackdown.
The company is currently testing new ways to charge more for the use of the same Netflix account. The company asked its customers in Chile, Costa Rica, and Peru to pay an additional fee to add another member to their account. The new member creates a sub-account using their email address.
They get their own stream, can access Netflix simultaneously with the primary account holder, provided they stay within their plan’s limits.
Customers can only watch on one device with a basic plan. Standard plans allow for two devices and premium plans four.
Customers who have multiple accounts in their households are subject to this latest test. Customers who use their account in a different household than their own for longer than two weeks will be notified via their mobile app. They can either add or remove a household.
Customers have the ability to manage their own homes and add or remove them as they wish. The number of Netflix users who can simultaneously watch Netflix does not increase by adding households.
