Netflix is trying a new way to get paid by password-borrowing freeloaders.
The company is rolling out an option in five Latin American countries under which existing customers can enable access from an additional home legitimately, for an extra monthly fee.
Starting next month, Netflix will launch an “add a home” feature in Argentina, the Dominican Republic, El Salvador, Guatemala and Honduras. That will add the ability for anyone in each additional home to stream Netflix on any device, at a price lower than a full standalone membership.
That comes after the streamer in March rolled out an “add extra member” feature in Chile, Costa Rica and Peru, which lets customers pay a monthly fee to let individuals outside their households access Netflix.
Netflix estimates that customers share their login credentials — in violation of its terms of service — with more than 100 million non-paying households worldwide, including over 30 million in the U.S. and Canada.
The “widespread account sharing between households undermines our long-term ability to invest in and improve our service,” Chengyi Long, Netflix director of product innovation, wrote in a blog post announcing the expansion.
In the five new markets, the cost for Netflix members to buy an additional “home” for streaming access will be: 219 pesos per month per home in Argentina; and $2.99 per month per home in the Dominican Republic, Honduras, El Salvador and Guatemala. Customers on the Basic plan can add one extra home; those with the Standard plans can buy up to two extra homes, and Premium-tier subs can purchase up to three extra.
In Netflix’s tests in Chile, Costa Rica and Peru, customers are able to add up to two Extra Member accounts for about $2-$3/month each, on top of their regular monthly fee.
Note that Netflix’s password-sharing rules apply to individuals in a customer’s household, rather than the physical confines of a home. So, for example, paying customers may access Netflix when they travel, the company said. “If you are away from the Netflix household for an extended period of time, you may be occasionally asked to verify your device,” it says on its customer-support website.
Netflix is scheduled to report second-quarter 2022 results Tuesday, July 19, after the market closes. The streamer previously forecast a net decline of 2 million subscribers globally; some Wall Street analysts believe Q2 sub losses will come in below that number thanks to the popularity of “Stranger Things 4.”
Netflix could generate an incremental $1.6 billion in global revenue annually if it launched the password-sharing payment upgrade plans worldwide, according to estimates by Wall Street firm Cowen.
