Last week Netflix announced that it plans to address the password sharing practice. According to the company, over 100 million households are sharing passwords, which means less subscriptions and missed revenue. The fact that Netflix is able to estimate the number of password sharers shows that they already have quite some insight as to who uses which account.
To address the issue, the company plans to add a fee for sub-accounts for up to two people outside the household address, going up to $ 2,99 per month. A test of this fee is already taking place in Peru, Costa Rica, and Chile. COO Greg Peters said that it will take a while to work this out and get the balance right.
This news comes as a surprise to many, as it is the first time ever a major streaming service is putting an end to password sharing. Ironically, Netflix actually encouraged password sharing five years ago by tweeting “Love is sharing a password” as it wanted to attract more viewers at that time. Whether other streaming services will follow Netflix’s footsteps is still unclear.