New Netflix Password Sharing Policy is Already a Confusing Mess in Test Markets

New Netflix Password Sharing Policy is Already a Confusing Mess in Test Markets
Netflix is testing out a new (and confusing) password sharing policy in three countries. (Image: Robyn Beck, Getty Images)

Stranger things have happened at Netflix, but its new policy to prevent password sharing is confusing users during its pilot program in Costa Rica, Chile, and Peru according to Rest of World.

What is Netflix’s new password sharing policy?

Netflix’s new password sharing policy is simple: it hits users who share passwords with an additional charge. The streaming service is defining a household as the immediate people a specific subscriber lives with. That means you can share your password with your roommates, but not your family member who lives across the country. For Netflix users who do want to share their account with those outside their home, they can add additional users for a fee. Business Insider reports that this fee is $US2.99 ($4) per added person, while Rest of World states that the fee is a little over $US2 ($3). Netflix did not immediately respond to our request for clarification.

Netflix began testing this new policy in March and, according to Rest of World, user reaction has been mostly negative after the outlet spoke to a dozen subscribers across Peru. Some users have cancelled their Netflix subscription completely, while others have continued to share their passwords with no repercussions from the company. That said, Netflix confirmed to Rest of World that the policy is “progressive,” and that it was testing different versions across Peru, Cost Rica, and Chile.

Why is Netflix worried about password sharing?

It appears that Netflix has run into some financial trouble lately. After announcing a loss of over 200,000 subscribers in Q1 2022 (the first time after a decade of growth), the streaming company said it was considering adding ads to generate more revenue. Netflix’s stocks also tumbled 30%. The company partially blamed its stock problems on users sharing passwords. Netflix also downsized its Tudum staff through layoffs last month after only a few months of working for the blog, and axed upcoming projects before entering production.

Netflix flew too close to the sun. Once a monolith of the streaming age, Netflix seemed to promise more than it could deliver, and it’s now succumbing to the consequences of its own indulgence. Competition from streaming services like Hulu and HBO Max are giving consumers a choice, something Netflix probably wasn’t too worried about when it was monopolizing the streaming industry just a few years ago. The company’s Terms of Use already say password sharing beyond households isn’t allowed, but for now, it seems passwords in the U.S. are still shareable without fear of being charged a fine.