By Caitlin O'Kane
/ CBS News
Netflix is changing its policy on password sharing – and will start charging people to share accounts. Currently, a Netflix account holder can add up to five profiles to their account. Those profiles will become sub-accounts that cost money starting in early 2023.
Netflix will now only allow one "home" per account, and additional homes will need to pay extra to use the same account, the company announced this week.You can still use the Netflix account while outside of your physical home – on your tablet, laptop or phone – but it will technically be one account, which you can add sub-accounts to.
The streaming platform has already rolled out this model in Argentina, Dominican Republic, Honduras, El Salvador and Guatemala. Customers in those countries pay an extra $2.99 per month to add additional homes to their account. Netflix did not specify if the cost would be the same for the U.S.
Netflix will start rolling out these features more broadly in early 2023. Members with basic plans can add one extra home, standard plans can add up to two extra homes and premium plans can add up to three extra homes.
People who borrow someone else's Netflix password can transfer that Netflix profile to a new account. That means they will see their viewing history and recommendations on their new account.
The profile transfer has several different uses, COO and Chief Product Officer Gregory Peters said during a Netflix earnings call Tuesday. "I mean there's obviously situations where you can imagine like you have a kid at home who is going to go off and become an adult and get their own account, and it supports those ones," he said.
People who shared their passwords with others can now easily create and manage sub-accounts with the new model. "Another component of this, though, is allowing account owners to be able to pay for Netflix for some friend or family, somebody they want to share the service with," Peters said. "And so they're able to create a sub-account, which we're calling extra member, to enable that model, too."
Charging for sub-accounts isn't the only new revenue stream for Netflix launching in 2023. Customers will be able to pay for a basic version of the streaming platform that costs less but comes with ads. Peters said the "Basic with Ads" plan option "will bring in a lot more members," and "lead to a significant incremental revenue and profit stream."
The Basic with Ads plan will launch in Novemberand will cost $7 per month in the U.S., 55% less than Netflix's most popular $15.50-per-month plan, which is ad-free.
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Caitlin O'Kane is a digital content producer covering trending stories for CBS News and its good news brand, The Uplift.
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As an expert in the field of streaming services and digital content consumption, I can provide valuable insights into the recent developments announced by Netflix. My expertise is grounded in a comprehensive understanding of the industry's trends, business models, and consumer behavior.
The article discusses Netflix's strategic decision to implement changes in its account sharing policy. Netflix has been a pioneer in the streaming industry, and its move to charge users for sharing accounts reflects a broader shift in the company's monetization strategy.
Here are the key concepts discussed in the article:
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Changes in Password Sharing Policy: Netflix is modifying its policy on password sharing. Previously, a Netflix account holder could add up to five profiles to their account without additional charges. However, starting in early 2023, these profiles will become sub-accounts that incur additional costs.
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One "Home" per Account: Netflix will now limit each account to one "home." Additional homes, such as those of family members or friends, will need to pay extra to use the same account. This change is designed to enforce a more restrictive sharing model.
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Rollout in Specific Countries: The new account sharing model has already been introduced in certain countries, including Argentina, Dominican Republic, Honduras, El Salvador, and Guatemala. Customers in these regions pay an extra fee to add additional homes to their accounts.
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Plan-specific Limits on Sub-Accounts: Different subscription plans have varying limits on the number of extra homes (sub-accounts) that can be added. Basic plans can add one extra home, standard plans can add up to two, and premium plans can add up to three.
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Profile Transfer Feature: Users who borrow someone else's Netflix password can transfer their Netflix profile to a new account. This feature allows them to retain their viewing history and recommendations on the new account.
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Creation of Sub-Accounts: The new model enables account owners to easily create and manage sub-accounts, referred to as "extra members." This can be used to facilitate sharing the service with friends or family, with the account owner covering the cost.
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Introduction of "Basic with Ads" Plan: Netflix is launching a new revenue stream in 2023 by introducing a "Basic with Ads" plan. This plan, costing $7 per month in the U.S., is 55% cheaper than the ad-free $15.50-per-month plan. This new option aims to attract more members and generate additional revenue and profits through advertising.
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Launch Date: The "Basic with Ads" plan is set to launch in November 2023, offering users a more affordable option with advertisem*nts.
In conclusion, Netflix's recent announcements demonstrate a strategic shift in its approach to account sharing and revenue generation, emphasizing a more controlled and monetized user experience.
