Netflix Testing New Guilt Tax For Password Sharers

Netflix Testing New Guilt Tax For Password Sharers
The Netflix logo is displayed at Netflix's Los Angeles headquarters on October 07, 2021 in Los Angeles, California. (Photo: Mario Tama, Getty Images)

Do you currently use a Netflix account paid for by someone outside of your household? Netflix would really like you to pay for that service and has struggled with how to crack down on password sharing. But the streaming company is testing a new idea that might get some of those freeloaders to pony up. Or, at the very least, get the people who are actually paying for the Netflix subscription to pay a little more.

Netflix is testing a new user-prompt in three countries that asks people to pay a slightly higher fee for using the service across multiple households. But the fee is completely optional, which makes it sound much closer to a guilt tax than a new tier of the service. Feel guilty that you’re getting something for free? Here’s a way to make good.

The company is also testing a new feature that would allow people with an existing profile on the service to transfer that profile — a feature that could theoretically encourage password-sharers to get their own Netflix account. Again, it’s not required, just something Netflix wants you to do out of a sense of obligation.

Netflix is first rolling out the features in Chile, Costa Rica, and Peru, while positioning the streamer’s desire for more money as a way to pay for better shows on the service. And it’s rather graciously saying that password sharing is just a point of “confusion” rather than a way for people to knowingly get the service without paying.

“We’ve always made it easy for people who live together to share their Netflix account, with features like separate profiles and multiple streams in our Standard and Premium plans,” Chengyi Long, director of production innovation at Netflix, said in a blog post on Wednesday.

“While these have been hugely popular, they have also created some confusion about when and how Netflix can be shared. As a result, accounts are being shared between households – impacting our ability to invest in great new TV and films for our members,” Long continued.

Adding a new member from outside your household to an existing plan will cost $2.99 US ($4) in Costa Rica, 2,380 CLP in Chile, and 7.9 PEN in Peru. A spokesperson for Netflix declined to say how much the service might cost in the U.S. if it makes the leap to American subscribers.

Users who opt to pay for a new “Extra Member” subscription account will be able to keep their viewing history, “My List,” and personalised recommendations, according to the company.

Netflix currently has about 221 million paying subscribers worldwide, according to Variety, with roughly 34% of those in the U.S. and Canada. And it’s no secret that subscriber growth slowed in 2021 substantially, with the company desperate to find new revenue streams — which is why it’s not surprise that Netflix is trying to get password sharers to pay up, even if it’s on a voluntary basis. The tricky part is not alienating existing customers with any strict password enforcement method that would make people want to simply give up their subscriptions.

“We recognise that people have many entertainment choices, so we want to ensure any new features are flexible and useful for members, whose subscriptions fund all our great TV and films,” Long said.

“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.”