Netflix Rolling Out Shared Password Option This Quarter

Netflix announced it plans to expand rollout this quarter of a new password sharing option that enables existing subscribers to share their subscriptions with non-subscribers for an extra monthly fee.

The streamer has been testing the concept in Chile, Costa Rica and Peru, charging subscribers sharing a password about 25% (upwards of $4) of a standard tier subscription. Non-paying members also have the option to set up their own account with their existing profile and content history.

Netflix says about 100 million subscriber households share passwords with non-paying users.

“Today’s widespread [non-paying] account sharing undermines our long term ability to invest in and improve Netflix, as well as build our business,” co-CEOs Sarandos, Peters and CFO Neumann wrote in the shareholder letter.

The executives said paid shared password members going forward would be able to access Netflix content from mobile devices and televisions similar to regular subscribers. Netflix expects the transition from non-paying shared accounts to paid or independent subscriptions could negatively short-term viewership data as compiled monthly by Nielsen.

“However, we believe the pattern will be similar to what we’ve seen in Latin America, with engagement growing over time as we continue to deliver a great slate of programming and borrowers sign-up for their own accounts,” Sarandos, Peters and Neumann wrote.

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