The end of free Netflix password sharing has begun: Last week, the streaming service began rolling out a system that charges fees for "extra member" subaccounts when people outside one household use the same membership, launching in Canada, New Zealand, Portugal and Spain. More countries, including the US, are expected to get the new charges as the initiative rolls out globally.
For years, Netflix was relatively lax about password sharing. Netflix tweeted "love is sharing a password" once, and founder Reed Hastings said in 2016 that he loves when people share Netflix. But last year, Netflix started testing ways to "monetize account sharing" after recording its deepest subscriber losses in a decade. In addition to the password-sharing fees, Netflix has also launched cheaper subscriptions supported by advertising, hoping to entice more people to pay for Netflix if they don't have to pay quite as much.
Netflix's dominance of streaming video -- not to mention years of unflagging subscriber growth -- pushed nearly all of Hollywood's major media companies to pour billions of dollars into their own streaming operations. These so-called streaming wars brought about a wave of new services, including Disney Plus, HBO Max, Peacock, Paramount Plus and Apple TV Plus. This flood of streaming options has complicated how many services you must use (and, often, pay for) to watch your favorite shows and movies online.
Now, under pressure from the intensifying competition, Netflix is pursuing strategies it had dismissed for years, including an account-sharing crackdown.
How much does password-sharing cost?
The company hasn't specified prices for these new charges in the US yet, but our best guess is that extra members will cost about $7.50 a month.
Prices so far vary by country, but the latest countries hit by fees are being asked to pay more than was charged in initial tests -- that is, the fees got pricier during Netflix's official rollout.
In Chile, Costa Rica and Peru, where these fees were first tested since last year, the average charge for an extra member subaccount was priced at roughly 25% the cost of a Standard plan in each country, on average. That means if Netflix were to stick to that practice, then each extra member subaccount in the US would cost between about $3.50 and $4 per month.
But last week, Netflix launched the fees in the first wave of countries as part of its official worldwide rollout of account sharing. And in these countries -- Canada, New Zealand, Portugal and Spain -- the prices for extra members are meaningfully higher, sometimes twice as much. On average, Netflix set the fee for extra members in these first-wave countries at 43% the price of a Standard plan in each country.
And Canada, which is the market most closely linked to the US, is being charged the most: Each extra member is priced at nearly half what you pay for a Standard plan there.
If Netflix applies the Canadian practice to the US, then each extra member subaccount would be about $7.50.
(By comparison, Netflix's cheapest tier in the US -- Basic With Ads -- is $7 a month. And in countries where the Basic With Ads tier is available and account-sharing also just rolled out, the pricing relationship is consistent there too: The price for extra members is a bit higher than you'd pay to watch Netflix with commercials through Basic With Ads.)
Who pays the password-sharing fee?
Extra members have their own account and password, but their extra member "slot" is paid for by the account owner who invited them to join the existing membership.
Since the model creates separate log-in credentials, it isn't really password sharing anymore. (Netflix uses the term "paid account sharing.") But the main account holder will be the person paying for both the regular subscription and the new subaccount.
When will Netflix start charging for password sharing in my country?
Last week, it launched the scheme in Canada, New Zealand, Portugal and Spain. In January, Netflix indicated that a full, global rollout will take a couple of quarters.
But Netflix hasn't specified a timeline for when other countries will get the fees.
"We're ready to roll those out later this quarter. We'll stagger that a bit as we work through sets of countries," Netflix co-CEO Greg Peters said in January, referring to the first quarter of 2023. "But we'll really see that happen over the next couple of quarters."
How will Netflix enforce it?
Will it block my account if I share?
The short answer is: We don't really know yet.
Netflix updated help-center pages last week that are tailored for the countries where the fees are now active, and these pages outline a system that will likely reflect the full rollout of these policies worldwide.
Unfortunately, enforcement is less clear now than it was in Netflix's previous language about account sharing, and Netflix isn't commenting on enforcement much beyond what is explained in the help center.
Netflix's enforcement also varied during the tests in Latin America, according to one report.
The current policies hinge on your account's "primary location" and the devices that connect to the Wi-Fi network there. Netflix help-center pages say your primary location is the main place you watch Netflix; you can set this primary location through a series of steps in the Netflix app on a TV. A Netflix spokeswoman said that members may get an "interstitial" message to set their primary location -- basically, a pop-up prompt on your TV's Netflix app.
Netflix's help-center pages also say that if a primary location hasn't been set, the service will automatically set one based on IP address, device IDs and account activity. However, the help-center pages also say that if you don't watch Netflix on a TV (or don't have one), you do not need to set a primary location for your account. (CNET reached out for clarification, but Netflix declined to specify further.)
Regardless, Netflix's help center also says the company doesn't collect GPS data to to determine precise physical location of your devices. "We use the IP address from the Netflix device or app to assume its general location (such as city, state/province, and postal code)," the policies state. "For example, your primary location may be displayed as 'near city, state/province.'"
You can also update or change your primary location from a TV anytime.
Previously, Netflix's help-center pages included language about "trusted devices," which were any device that logged in to Netflix on the primary location's Wi-Fi network at least once every 31 days. Netflix appears to have removed all references to "trusted devices" and "31 days" from its account-sharing policies now.
But Netflix will distinguish between devices that are accessing Netflix while traveling (which is permitted) versus those that are watching Netflix elsewhere because the viewer lives in a different household (which is not permitted). According to a spokeswoman, if a device logs in to Netflix on the primary location's Wi-Fi network about once a month, it should avoid any disruptions, according to a spokeswoman. (And, again, Netflix's policies say you can change your primary location anytime from a TV.)
But what are those possible disruptions? Previously, Netflix's help-center pages included language about device-specific blocks, as in: If a device persistently accesses an account outside the primary location, then it may be blocked from watching Netflix. But the current help-center pages now appear to have removed references to device blocks, so it's unclear how Netflix will be enforcing the restrictions against watching Netflix from a different household. A Netflix spokeswoman declined to comment further.