In an effort to find new revenue streams after seeing years of rapid growth, Netflix is intensifying its efforts to charge users for using shared accounts.
In order to add a “second home” to their accounts, the streaming service announced it will charge users in five countries in central and southern America an additional $2.99 (£2.50) each month.
It also issued a warning that the international crackdown on password sharing will occur.
The most recent disclosure was made prior to the findings’ Tuesday deadline.
The corporation disclosed its first subscriber loss in more than ten years earlier this year. The company is required to publish an update on its members along with its financial results, and it is anticipated that this report would highlight the decline in subscriber growth.
It is a sharp reversal for a firm that for years appeared to be growing unabated as it transformed how people consume entertainment globally and upended the old television and movie theater industries.
When the epidemic struck in 2020, individuals who were stranded at home with few other alternatives for entertainment rushed to its events, solidifying its status as a global powerhouse.
But when pre-pandemic habits resume, Netflix is having trouble luring new subscribers while also keeping hold of the devotion of current ones.
People in nations like the US and the UK have canceled memberships due to price increases, while a slew of new competitors, like Disney, who frequently used to sell its films and television shows to Netflix, are tempting US and international consumers to switch.
According to research, more people are opening accounts to watch particular shows before closing them.
Families’ reactions to the company’s demand for additional money for joint accounts are unclear.
In March, Netflix announced that some families, including those in Chile, would be charged for the addition of a “extra member.”
The most recent change, which will take effect in Argentina, Honduras, Guatemala, El Salvador, and the Dominican Republic starting next month, frames the request somewhat differently and asks for $2.99 for every extra house.
It said that users may alter their profiles at any moment to delete their residences.
According to Netflix, it plans to test out several fee structures before implementing them internationally as early as the end of this year.
According to Guy Bisson, executive director at Ampere Analysis, when things were going well, Netflix might have gotten away with ignoring account sharing, but now it makes sense to attempt to reach out to those who are sharing passwords, even at the risk of alienating some.
He replied, “I think they’ll probably gain more by doing this than they would lose.” They can implement it gradually and successively to ensure that the desired outcome is being achieved.
In addition to cracking down on password sharing in an effort to increase revenue, Netflix has stated that it will test a less expensive ads-based service.