Netflix Tests New Password Sharing Fee Model in LatAm

Netflix, subscriptions, Latin America

Netflix plans to ask customers in five Latin American countries to pay a fee to use their accounts in homes other than their own, the company said in a blog post Monday (July 18).

The company added that it hopes this will help add more revenue, as “today’s widespread account sharing between households undermines our long term ability to invest in and improve our service.” The five countries impacted are Argentina, El Salvador, Guatemala, Honduras and the Dominican Republic.

Customers will have to pay extra if they use an account for two weeks outside their primary residence, with the post noting Argentinian customers will have to pay an extra 219 pesos ($1.70), while users in the other four countries will have to pay $2.99.

However, it won’t affect the use of Netflix for mobile devices like tablets, laptops or smartphones, and it won’t affect those on vacation, per Bloomberg.

The streaming giant, which has been facing some struggles amid rising competition and subscriber losses, has floated this idea before. The company said there are over 100 million households using accounts paid for by others, according to the report.

Netflix has previously said password sharing is one of the biggest reasons for its loss in subscribers. Because of its difficulties, Netflix has seen its share price dip by over 65% this year, with investors growing cautious.

The streaming platform has also talked about adding an ad-supported pricing tier which would be less than the current price per month for the service.

PYMNTS wrote earlier this month that Netflix had selected Microsoft as its advertising technology and sales partner to help develop the new subscription tier.

Read more: Microsoft to Help Launch Ad-Supported Netflix

“Microsoft has the proven ability to support all our advertising needs as we work together to build a new ad-supported offering,” Netflix said at the time. “More importantly, Microsoft offered the flexibility to innovate over time on both the technology and sales side, as well as strong privacy protections for our members.”

The company said this was still in the early stages — though the end result would be more choices for viewers.