For months, the specter of Netflix ending password sharing has haunted U.S. customers. It seems that change is finally on the horizon, according to Netflix’s latest letter to shareholders. “In Q1, we launched paid sharing in four countries and are pleased with the results,” Netflix said. “We are planning on a broad rollout, including in the US, in Q2.” This new initiative called “paid sharing,” will essentially require users to pay an extra membership fee in order to add profiles for those living outside the household of the account owner.
In February, Netflix shared details on what this paid account sharing system would actually look like. It’s a bit confusing but here’s the core of it: Account holders will need to indicate a “primary location,” and people physically living in that household — people who are on the home’s network — can use that account. Users will have to pay more to support profiles for people who live outside the home.
Just how many accounts will be affected, you might ask? Though it didn’t specify number of individual accounts, Netflix’s shareholder letter indicates account sharing is used in more than 100 million households. Netflix didn’t specify whether that just meant users’ additional profiles included within an account owner’s subscription tier, or whether that included hangers-on (like your younger brother who mooches off your goodwill) who happen to have a password they can use to log onto your account.
Netflix currently offers multiple subscription tiers, some of which allow account holders to add additional profiles. Right now, only the two most expensive subscriptions — Standard ($15.49/month) and Premium ($19.99/month) — allow users to add extra members. Standard means you get one extra profile, while Premium lets you add two.
The new system would mean subscribing to one of those plans, but paying an additional member fee if someone who lives outside the household wants the profile. (Lone Tree Voice’s explainer on the new pricing plan goes into greater detail with a breakdown on what actual pricing looks like.) Basically, college students, long distance lovers, spread-out friend groups, adult-aged siblings — may the odds be ever in your favor, for duking out this new pricing.
Netflix has already rolled out paid sharing in four countries: Canada, New Zealand, Spain, and Portugal, and says it has been “pleased with the results,” according to the letter to shareholders. Apparently there’s a “cancel reaction” when Netflix launches paid sharing, but it appears that this initial loss is recovered as “borrowers” — which seems to be Netflix’s word for people who had previously enjoyed a profile on an account outside their household — activate new accounts, or existing users pay the additional fee for those “extra member” accounts.
Netflix first announced its intention to add anti-account sharing measures at the end of December 2022. The company reported its first ever months of subscriber losses in April 2022, and though the numbers normalized in the following months, the anxiety seems to have stayed.
This is just one of a handful of changes coming to the platform. Netflix also said it would end its DVD rental service in September. It’s truly the end of an era.
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