It’s been a bumpy ride for Netflix and notification that it will charge for password sharing that doesn’t go as smoothly as they might expect, a new report claims. Subscribers in Peru who opted into the new password-sharing restrictions reported confusion over Netflix’s lax definition of “household” and noticed a lack of clarity around fees. The difference applies to consumers.
Global technology news site The rest of the world informally surveyed more than a dozen Netflix users in Peru, after Netflix’s March Announcement that it will ask customers in the country – as well as in Chile and Costa Rica – to pay extra for sharing their account passwords outside of their homes. Central and South America represent Netflix’s lowest revenue per user, which helps explain the choice of markets.
The majority of those surveyed by Rest of World in Peru said that they had yet to receive unified notification of the new charges, even though it was more than two months after the policy was first announced. Some subscribers have experienced price increases and then canceled their Netflix accounts. But others who ignored the announcement of the new policy were able to share their accounts between households at no extra cost, they claimed.
An anonymous Netflix customer service representative told Rest of World that if a customer calls to argue that a member of their immediate family is using an account from a different location, the representative is instructed to let them know that the person can continue to use the account through the verification code at no additional cost. Essentially, this means that people who have appealed for support can ignore the new policy and continue to share subscriptions unaffected. The representative said their team members are often confused about the policy.
Netflix has been there since confirmed that only people living in the same building are considered to be in the same household. Additionally, the company told the outlet that the rollout has “progressed” and that subscribers across the three test markets may be paying different fees.
Based on Statista, in 2021, Netflix generated approximately $3.58 billion in revenue with its operations across Latin America. This accounted for about 13.4% of Netflix’s global revenue that year, which totaled about $30 billion.
In Peru, two additional people using the subscriber’s account but living in another apartment, city or country are charged 7.9 soles (about $2.99) per month. This option is cheaper than creating a new Netflix account, as Peruvian subscribers pay 24.90 soles (about $6.80) for the basic plan.
Although Netflix has long had a policy against sharing passwords, it was never strictly enforced. In fact, Netflix CEO Reed Hastings previously said that’s a good thing.
However, after being particularly harsh Q1 2022 seeing Netflix’s first drop in overall subscribers since 2011, the streaming giant has made it clear that it will charge extra fees for splitters who sign up across multiple addresses. About 33% of Netflix subscriptions are shared across multiple households, each Leichtman research group. Netflix confirmed this in its recent earnings report when it said about 100 million households have parasites logged into streaming service accounts.
Analyst predict that Netflix subscriber growth has peak, and the company seems to have hit a ceiling of 220 million subscribers. In addition, streamers have lay off about 150 workers after losing 200,000 subscribers in the first quarter.
Due to confusion surrounding early adopters’ experience with the new feature, Netflix will likely need to modify its password sharing system before rolling it out globally. The company plans to expand its deployment by the end of 2022, in parallel with launch of a cheaper ad-supported grants.
