For months, the specter of Netflix ending password sharing has haunted US customers. It seems that a change is finally on the horizon Netflix’s latest shareholder letter. “During the first quarter, we launched paid sharing in four countries and are pleased with the results,” Netflix said. “We’re planning a broad rollout in Q2, including in the US.” This new initiative, called paid sharing, essentially requires users to pay an additional membership fee to add profiles for those living outside of the account holder’s household.
In February, Netflix shared details of what this paid account-sharing system would actually look like. It’s a bit confusing, but here’s the gist: Account holders must provide a “primary location,” and people who physically live in that household — people who are on the home’s network — can use that account. Users have to pay more to support profiles for people living outside the home.
How many accounts will be affected, you might be wondering? Although the number of individual accounts was not specified, Netflix’s shareholder letter indicates that account sharing is used in more than 100 million households. Netflix didn’t specify if this meant just the additional profiles of users included in an account holder’s subscription tier, or if this included followers (like your younger brother disguising your goodwill) who happen to have a password with which they can login to your account.
Netflix currently offers multiple subscription tiers, some of which allow account holders to add additional profiles. Currently, only the two most expensive subscriptions – Standard ($15.49/month) and Premium ($19.99/month) – allow users to add additional members. Standard means you get one additional profile, while Premium lets you add two.
The new system would mean subscribing to one of those plans, but paying an additional membership fee if someone living outside the household wanted the profile. (Polygon’s explainer of the new pricing plan goes into more detail with a breakdown of actual pricing.) Basically, college students, long-distance lovers, sprawling friend groups, adulthood siblings — may the odds be your favor to challenge this new pricing plan.
Netflix has already rolled out paid sharing in four countries: Canada, New Zealand, Europe and Portugal, and says it’s “pleased with the results,” according to the letter to shareholders. Apparently there’s a “cancellation reaction” when Netflix launches paid sharing, but it appears that that initial loss will be recovered when “borrowers” — which seems to be Netflix’s word for people who previously had a profile on an outside account of their household – reactivate accounts, or existing users pay the additional fee for these “extra member” accounts.
Netflix first announced its intention to introduce measures against account sharing in late December 2022. The company reported its first few months of subscriber losses in April 2022, and while numbers normalized over the following months, concerns appear to have lingered.
This is just one of a few changes being made to the platform. Netflix also announced that it would end its DVD rentals in September. It really is the end of an era.
