Just a few weeks after introducing its latest price hike, Netflix (NFLX) has announced that it’s adding an additional fee on people who share their account password.
In a blog post, Chengyi Long, Netflix’s director of product innovation, said “While these [household plans] 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.”
During a test period, Netflix will try out its approach in three countries: Chile, Costa Rica, and Peru. In those test countries, subscribers will get prompts to add an extra viewer to their package at a discounted price of $2.99 U.S.
This is not the first time Netflix has experimented with a clampdown on password sharing. Last year, the company experimented with an account verification tool to keep unauthorized users from accessing other people’s accounts.
But the addition of “add an extra member” and “transfer profile” features indicates that Netflix is trying to keep growing as the company’s subscriber numbers level off. Slowing subscriber growth has sent Netflix stock sharply lower in recent months.
Year to date, Netflix’s share price has declined 40% to $357.53, wiping out all the gains the stock had achieved during pandemic lockdowns when its subscriptions skyrocketed.