This year, the streaming service Netflix for the first time faced a tangible outflow of customers and a drop in income, so the company’s management began to actively look for new ways to improve the financial situation. One of them will be the appearance of advertising on service in partnership with Microsoft. In addition, if before Netflix was not worried about users passing on their passwords to family and friends, now it is starting to fight such practices. In some Latin American countries, Netfix subscribers will be charged extra if they watch movies and series on TV outside of their home.
Customers in Argentina, El Salvador, Guatemala, Honduras and the Dominican Republic will be asked to pay an additional fee if they use their Netflix account for more than two weeks outside of their primary residence, writes Bloomberg. This will not affect Netflix usage on mobile devices such as smartphones, tablets, or laptops, nor will it affect people on holiday. Adding an additional home to Netflix will cost 219 pesos ($1.70) in Argentina and $2.99 in other countries.
Netflix explains its new policy by the fact that more than 100 million households use accounts paid for by other people, and cites password sharing as one of the main reasons for the slowdown in subscriber growth. The company lost 200,000 customers in the first quarter and predicts it will lose another 2 million in the second. Its share price has fallen more than 65% this year as investors worry the streaming business is struggling.
“Today’s widespread account sharing between households undermines our long term ability to invest in and improve our service,” writes Chengyi Long, director of product innovation at Netflix, on their blog.
Password sharing was particularly common in Latin America. Now Netflix will try to combat this by trying not to provoke a negative reaction from users who are paid subscribers.
Netflix notes that the company will use data such as IP address, TV ID code, and monitor account activity to determine whether a user is watching the service at home or using their account elsewhere.