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If you are sharing a Netflix account with your friends, we have sad news for you. Netflix is taking a step to curb password-sharing violators and users leeching off someone else’s Netflix account.

In an attempt to crack down on illicit password-sharing, Netflix is launching a test, starting from three countries – Peru, Chile, and Costa Rica. According to Netflix’s terms of service, one account “may not be shared with individuals beyond your household.”

After years of password-sharing that falls out of these terms, Netflix has decided to take action. The recent tests will curb freeloaders, as they will have to pay for access.

The upcoming test will roll out in three countries first, and according to Chengyi Long, the director of product innovation at Netflix, the streaming service will allow users to share accounts with people outside their household, but with extra fees.

Long further said that while Netflix sharing has made things easier for people, “they have also created some confusion about when and how Netflix can be shared…accounts are being shared between households – impacting our ability to invest in great new TV and films for our members.”

Users will be able to add the extra member for a small fee, but it will be less than the cost of signing up for a new account. For example, in Peru, the cost of a standard plan is PEN 34.90/month and to add an extra member, you will only have to pay 7.9 PEN.

With this option, users of Standard and Premium Netflix plans will be able to add an extra member for up to two people outside their household. Each added member will get their own profile, log in and password. Here’s the breakdown of the extra member option in three test countries:

CountryBasicStandardPremiumExtra Member
Peru24.90 PEN34.90 PEN 44.90 PEN 7.9 PEN
Chile5940 CLP8320 CLP10700 CLP2380 CLP
Costa RicaUSD 8.99USD 12.99USD 15.99USD 2.99

In addition to this, Netflix is also testing with options of transferring user profiles to new accounts. Account-holders in the testing countries can either add a new member or allow people to transfer their information to a new account while keeping their viewing history and preferences.

Just to be clear, Netflix says that this is just a test in three countries only. There is no need to freak out as they might decide not to expand with this plan outside these three markets.

“We’ll be working to understand the utility of these two features for members in these three countries before making changes anywhere else in the world,” said Long.

Viewers cannot help but think, why after years Netflix has decided to take action against users who go against the terms of use of the service. In short, Netflix is looking for ways to expand its subscriber base – shifting from subscriber growth to maximize growth per subscriber.

A few years back, Netflix’s priority was to grow fast in the competitive VoD streaming industry. They used several tactics like account sharing, free trials, etc. It also offered a Netflix free trial to attract users, which was later on removed from almost all regions.

Reed Hastings, the co-founder of Netflix, once said, “We love people sharing Netflix whether they’re two people on a couch or 10 people on a couch… it’s a positive thing, not a negative thing.”

Here is a Tweet from Netflix from back in 2017:

However, today seems to be the opposite of it. Netflix’s growth in North America had slowed down in 2021, as almost 90% of the subscribers were from outside Canada and US. Spence Neumann, Netflix CFO, said that there is still a lot of room to add more subscribers globally, especially in the Middle East and Asia-Pacific region.

Earlier this year, the company did the most obvious thing to increase profits by increasing subscription costs in the US, Canada, UK, and Ireland. In the US, the prices have been hiked for the third time in three years now.

If Netflix implements this testing in other regions as well, it could generate healthy revenue. According to a research survey by an advertising firm, almost half of the Netflix users in the US share their accounts with relatives and friends.

If Netflix wants to convert password sharers into paying users, it has to be careful if they don’t want people to see them as “capitalists overeager to make profits.”

Netflix made a total of $221.8 million in 2021 worldwide via subscribers, out of which 34% or 75.2 million were in Canada and the US.

For now, Netflix says they are only launching tests in three countries and have not planned to expand beyond. The test is to let users comply with the streaming service’s terms of use and not crackdown on offenders. After evaluation of payment options, a similar could be launched in North America and other global markets soon.