Netflix is experimenting with charging for password sharing between households

The days of swapping Netflix passwords may be coming to an end soon. The streaming service has started testing a new feature that will charge users for adding additional profiles to their subscription.

Chile, Costa Rica, and Peru are testing the program. It is unknown when or if the feature will be implemented in other countries.

Netflix's head of product innovation, Chengyi Long, said in a statement that the company "has always made it easy for people who live together to share their Netflix account," allowing people to create distinct identities on a single subscription. "Accounts are being shared between households," Long added, "which is limiting our capacity to invest in exciting new TV and films for our members."

Subscribers who share their accounts with up to two people outside their homes will be charged for the new capabilities. In Chile, subscribers will be charged $2.98 per month, $2.99 in Costa Rica, and $2.12 in Peru.

Last year, the company launched two-step verification, a less obvious method of preventing password sharing. However, the new fee will be the company's toughest assault on the practice yet.

The end of Netflix password sharing signals yet another shift in the firm's strategy, indicating that the corporation is focusing on existing consumers rather than new members to help boost revenue.

Netflix stated in January that it would raise the price of its most popular membership from $14 to $15.50, marking the company's second price rise in two years. Soon after, Netflix announced that in the first quarter of 2022, it expects only 2.5 million new customers, the lowest number in years.

Netflix has also been battling with new streaming platforms that have launched in recent years, such as Disney+ and HBO Max, despite remaining the most popular. According to analysts, streaming companies, such as Netflix, have been keeping their costs low in order to entice new users, albeit the current prices may not last long.

The streaming conflicts haven't exactly been profitable for corporations that have long profited from both high cable rates and TV ads, particularly due to password sharing, according to media executives.

In 2020, Tom Rutledge, CEO of Charter Communication, a major US cable firm, said to CNBC, "Media companies have had a great distribution infrastructure for decades." "It's just too easy to receive the stuff without paying for it now," he says.

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