You might have to call your ex’s roommate’s aunt’s hairstylist and tell them they can’t use your Netflix anymore. In a Variety exclusive, the streaming service announced it will begin giving account holders an option to pay an additional fee so their subscription can be used beyond their household.
Chile, Costa Rica, and Peru will be the first countries to experience this change, which is an attempt to curb the rampant account sharing that has been endemic to Netflix (and really, every streaming platform from Hulu to Spotify) for years. The exact added fee varies slightly due to local currency conversion rates, but roughly comes out between $2 and $3 USD.
As Variety noted, the official Netflix terms of use say that an account “may not be shared with individuals beyond your household,” but this has rarely ever been enforced. It’s why Netflix account sharing memes are among our great cultural exports. (There has also been some uncertainty over how exactly the company defines a “household.”) The company began introducing measures to curtail password sharing in 2021, with CEO Reed Hastings saying, “We’ll test many things, but we would never roll out something that feels like ‘turning the screws.’”
Netflix’s Director of Product Innovation, Chengyi Long, wrote about this upcoming adjustment in a blog post, which states that those with standard or premium plans can “add sub accounts for up to two people they don’t live with,” which will be accessed with a unique password. People will also have the option to transfer their existing user profile to a new account that maintains their viewing history and recommendation algorithm.
“We’ve always made it easy for people who live together to share their Netflix account, with features like separate profiles and multiple streams in our Standard and Premium plans,” Long wrote. “While these have been hugely popular, they have also created some confusion about when and how Netflix can be shared. As a result, accounts are being shared between households – impacting our ability to invest in great new TV and films for our members.”
While the company is perhaps the best-known of its peers, its dominance in the market has waned. Per the Los Angeles Times, Netflix fell below its forecast for added subscribers in the fourth quarter of 2021, and, overall, added 19 million fewer new subscribers in 2021 than it did 2020. Meanwhile, HBO Max, Disney+, Hulu, and others continue to make inroads into the market.
As Long’s post reads, the intention here is apparently to use the additional money to create new programming. Projections obtained by Variety, indicate Netflix spent $13.6 billion on original content in 2021, and that number could get as high as $18.9 billion in the coming years. Netflix measures the financial success of its programs through a metric called “impact value.” According to Bloomberg, last year’s ultra-successful Squid Game generated nearly $900 million of it.
In January, Netflix announced a price increase for all three of its tiers, raising the basic plan to $9.99 per month, the standard version to $15.49 per month, and the premium to $19.99.