Netflix has announced that it will expand its crackdown on subscribers sharing their passwords with friends and family members from different households.
Users of the streaming platform in certain test countries will soon be asked to “add a home” for an extra fee if they want to share their account with another household.
“A home is a physical location—like your house—where you can use your Netflix on any of your devices, and the number of devices you can watch on at the same time depends on your plan,” Netflix explained.
From August 22, users in Argentina, the Dominican Republic, Honduras, El Salvador, and Guatemala will be asked to pay an extra fee if they sign in to Netflix on a TV outside their homes.
Customers in the Dominican Republic, Honduras, El Salvador, and Guatemala will pay $2.99 per month per extra home while the fee for users in Argentina will be 219 Argentine pesos (US$2.26) per month.
“We will not automatically add a home and charge the extra fee,” Netflix said in a statement published in its Help Center.
The new scheme comes as Netflix reported that it lost around 1 million subscribers in the first quarter of 2022.
It subsequently cut around 450 jobs in the United States and Canada in a belt-tightening move.
Customers will continue to be able to watch Netflix on their laptop or mobile device while traveling, but new limitations will be placed if they watch on a TV.
While traveling, users can watch Netflix on a TV outside their home for up to two weeks provided their account has not previously been used in that location.
This will be allowed once per location, per year, Netflix said.
The Basic, Standard, and Premium plans let users add one, two, and three extra homes respectively.
IP addresses, device IDs, and account activity will be used to track account sharing.
Netflix’s announcement comes as it reported on Tuesday that it lost around 1 million subscribers.
The streaming behemoth laid off around 450 employees in May and June, mostly in the United States, as subscriptions substantially fell for the first time in a decade.
The company said in May that the job cuts would enable it to prioritize spending on content and that the job cuts weren’t about employee performance.
Chengyi Long, Netflix’s director of Product Innovation, wrote in a blog post that “widespread account sharing between households undermines our long-term ability to invest in and improve our service.”
“We value our members and recognize that they have many entertainment choices,” Long said.
“So we’re working hard to make great TV shows and films, and to be as thoughtful as possible about how we charge for use across multiple homes.
“We will not make changes in other countries until we better understand what’s easiest for our members.”
In April, the company told shareholders (pdf) that one reason revenue growth had slowed is because of the “relatively high” amount of account sharing.
Around 222 million households pay for Netflix, which the company said is mostly accessed via TVs connected to broadband internet. But the company estimates that Netflix is being shared with over 100 million additional households, including 30 million in the United States and Canada.
Besides account sharing, Netflix said it faces a more crowded streaming marketplace, with Amazon and Disney launching platforms, and macro factors such as sluggish economic growth, increasing inflation, conflict in Europe, and COVID-19.
