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Netflix’s campaign against password sharing is now spreading to subscribers in the US and other global markets, after a delayed launch. The streaming company originally planned to offer Paid Participation to US subscribers in the first quarter of this year, but pushed the start date back to the summer, after seeing cancellations in markets where it had already launched the changes. Under the new rules, US subscribers will either have to kick people out of their Netflix account or pay $7.99 per month for additional memberships for those outside their main home.
The company offers tools to make this transition easier, including a way for existing subscribers to view which devices are signed into their account and remove devices that shouldn’t have access, as well as tools to reset their password.
For those who share someone else’s Netflix account, they can switch to one of their own with the Transfer Profile option that will help them transfer their existing account information, including their watch history and watchlist.
The feature was met with a backlash from consumers, but Netflix assured investors that despite some early cancellations, it believes the password campaign will be beneficial to its long-term growth as a business and financial health.
During first-quarter earnings, for example, Netflix co-CEO Greg Peters said the results of the password campaign in the first supported markets are very similar to how subscribers react to price increases.
“We see an initial reaction to cancellation and then build on it, both in terms of membership and revenue as borrowers sign up for their Netflix accounts and existing members buy additional member facilities for people they want to partner with,” Peters told investors on the earnings call in April. “So, first of all, it was a strong validation to see consistent results in these new countries, because there are different market characteristics that are different from each other and also different from the original Latin American countries,” he added.
Netflix first began testing the feature in Latin American markets before expanding access to Canada, New Zealand, Portugal and Spain earlier this year. With its global launch today, it will reach a wider range of global markets, including Brazil, Bolivia, Belize, France, Germany, Iceland, Ireland, Italy, the Philippines, Malaysia, Israel, Thailand, Taiwan, Switzerland, Sweden and more. In total, dozens of global markets will start seeing this feature in the coming weeks and months, Netflix says.
The company in the first quarter reported a net increase of 1.75 million global subscribers in the quarter, which fell short of Wall Street’s estimate of 3 million, to a total of 232.5 million accounts globally.
It also shared during the earnings that it plans to roll out the password sharing changes to subscribers in the US on or before June 30.
Netflix announced today on its blog that it is sending an email to those members in the US who share their Netflix account.
“A Netflix account is intended for use by a single household,” the company warns. “Anyone who lives in this house can use Netflix wherever they are – at home, on the go, on vacation – and take advantage of new features like profile transfer and access and device management,” the post reads.
The email itself, titled “Update on Participation,” simply details available options and member points for further help documentation, if needed.
In an email sent to the press, Netflix explains that the email is being sent because it has “now begun to release updates for engagement in countries around the world, including the United States.”
Although previous tests indicated that Netflix might rebound after cracking a password, it has yet to see the results of doing so in its largest and most important market, the United States, where it faces growing competition for users’ time and money.
The timing of the launch announcement is notable, as today HBO Max transforms into Max, a new service that brings together HBO and Discovery+ content under one roof. Next month on June 27, Paramount+ will also add Showtime to its service as well.
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