Netflix will conduct a “broad rollout” of the password-sharing crackdown that it began enforcing in select countries during 2022, the company said today in its Q1 2023 earnings report [PDF].
Netflix says it will implement its “paid sharing” initiative to additional countries (including the United States) during the second quarter. Netflix said that it was “pleased with the results” of the password sharing restrictions that it implemented in Canada, New Zealand, Spain, and Portugal earlier this year.
In Canada, the paid sharing push resulted in a larger Netflix membership base and an acceleration in revenue growth, which spurred Netflix to expand it to the United States and other countries.
When Netflix expands its paid sharing rules to the United States, Netflix subscribers who share an account with viewers who do not live in the same household will need to pay for an additional member. In Canada, Netflix charges $7.99 CAD for an extra member, which is around $6 USD. Prices are per person, and up to two additional people can be added to an existing Netflix Standard or Premium plan.
Netflix says that while there is a “cancel reaction” expected in each market where paid sharing is implemented, increased revenue comes later as borrowers activate their own Netflix accounts and existing members add “extra member” accounts.
The extra membership fee brings with it a profile, personalized recommendations, login, and password for each person. Netflix account holders can start a transfer process to allow viewers on their account to create their own separate and paid account.
Password sharing has long been a thorn in the side of Netflix, as password sharing directly affects the company’s profits, and the streamer has been exploring various ways to put an end to the practice.
While Netflix has never officially allowed password sharing, it has looked the other way for years. An estimated 222 million paying households share passwords with an additional 100 million households that Netflix wants to collect money from.