Netflix says it will end up charging you more if you share your account – TechCrunch

In light of Netflix’s subscriber losses, the company today announced during its first-quarter earnings call that it will expand its trial that charges members a higher price if they are involved in sharing accounts with people outside their home. The company began testing the feature in March in Chile, Costa Rica and Peru, but now says it plans to roll out the solution in global markets, including the US, in about a year.

The streamer clarified that it will need to continue to iterate on the feature for about a year or so to ensure the right balance in terms of how much to charge extra to subscribers who have shared their Netflix account with other users outside their own home. .

“Frankly, we’ve been working on this for almost two years…. A little over a year ago, we started doing some lightweight test releases that… informed our thinking and helped us build the engines we are deploying now,” explained Netflix Chief Product Officer Greg Peters on the earnings call. “We’ve just done the first major tests in countries, but it will take some time to sort this out and get that balance right.”

Currently, Netflix’s Standard and Premium subscribers in its few test markets are being given the option to add “sub-accounts” to the service for people they don’t live with. Each sub-account will have its own profile and personalized recommendations, but it will also have its own Netflix login and password. This prepares them to become an established member with their own account in the future. If they choose to make this change, their viewing history, watchlist (“My List”) and personalized recommendations will be transferred to their own account with their own billing information. (And since the member who shares their account now has to pay more, they can choose to remove the profiteer from their account when the new charges begin.)

Netflix has previously said that this solution does not rely on location-based data such as GPS. Instead, it’s leveraging the same information it uses to provide its service to its end users today, including an IP address, device IDs, and other information about devices connected to the Netflix account throughout the house. Through this method, Netflix can identify when there is persistent sharing taking place outside of a home.

He noted that sub-accounts do not count as subscribers while they are still involved in sharing accounts with another family.

Today, Netflix estimates that there are around 100 million households around the world sharing their user accounts, and more than 30 million of them are in the US and Canada.

Netflix says that by asking members who share their accounts to pay more, it hopes to strike the right balance between still allowing sharing to take place, as well as helping to monetize everyone watching and getting value from its service. The actual dollar and cents that “value” will translate into, of course, has yet to be determined – and may vary across markets.

In its test markets, the additional cost for non-domestic members is 2,380 CLP in Chile, US$ 2.99 in Costa Rica and 7.9 PEN in Peru. That’s cheaper than a full Netflix account plan, but it’s also more than it cost to share someone’s Netflix account for free.

That’s not the only way Netflix plans to monetize its subscriber base. The company also said it will introduce an ad-supported plan.

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