The video streaming provider Netflix wants customers to pay additional fees if they share their password with people who do not live in the same household. The company sent out a corresponding email this week. Accordingly, subscribers in Germany should pay 4.99 euros per additional person per month. The company did not say how quickly Netflix wants to enforce the new rules. Accounts that are used by third parties should first receive a message announcing that they will be blocked soon.
It is also not completely clear how Netflix intends to find out in the future whether a device belongs to your own household or not. However, test runs in markets in Central and South America show where the journey is likely to lead. Accordingly, Netflix defines the “household” via the main used WiFi and the IP address of the devices used. In test markets like Costa Rica, users have to connect to their home Wi-Fi and watch something on Netflix once every 31 days. The devices they use to do this also remain unlocked for mobile use. If you only use a tablet occasionally when traveling, you could run the risk of not being able to use Netflix on this device at first. This problem is apparently to be solved via an activation code that is sent to customers via SMS or email. This then unlocks the device for seven days.
Will parents be bummed for Netflix codes in the future?
It could also be one of the ways that stubborn naysayers can keep using a friend’s or parent’s Netflix account. Many children who have left home would rather ask their parents for an activation code once a week than transfer five euros a month. On the other hand, five euros are quite manageable. Netflix apparently assumes that the account holders are so annoyed by the requests for activation codes that they would rather spend five euros more.
Scene from the American Netflix reality TV series Queer Eye.
(Photo: NETFLIX)
Netflix expects significantly higher revenues from the stricter regulation. The company still makes a lot of money. Profits have been steadily declining since the 2021 peak, when Netflix generated over $5 billion. According to its own statement, the company assumes that up to 100 million users use the service via a third-party account, a very high proportion of around 230 million paying customers. Friends share their accounts with each other, children use their parents’ accounts or vice versa. According to the company’s terms of use, account sharing has been prohibited for some time, but Netflix has never implemented the ban so far. There was no reason, as Netflix grew and grew until the first quarter of 2022, when companies first reported a 200,000 drop in membership. In the following quarter, nearly a million users canceled their subscriptions.
Netflix is also cutting back on its own employees
Since then, Netflix has implemented a number of measures designed to boost profitability. More than 400 employees were laid off and the cheaper basic subscription with advertising was introduced. The tougher action against naysayers should now help Netflix to win more customers again in the medium term. The company expects that the number of users will initially decrease with the action against free riders. In Canada, for example, there are now more paying users and higher income than before, Netflix said. This made you feel validated.
In the premium account, which costs 17.99 euros, subscribers should be able to pay for up to two “extra members”. In the standard account, which costs EUR 12.99 per month, only one additional slot is provided. At 4.99 euros, the additional subscription costs just as much as the cheapest Netflix account, with which customers have to live with advertising breaks. The new additional account, on the other hand, is provided in the same quality as the mother account. If you join a premium account without advertising, you also get this quality for 4.99 euros. The additional account comes with other restrictions. The account can only be activated in the country of the paying customer. The start of the procedure in the important US market was also announced on Tuesday. There, the additional account should cost $7.99.
Netflix announced last month that after more than 25 years, it would finally stop shipping DVDs by mail in the United States. The last discs in the characteristic red envelopes should be sent out at the end of September, the offer has hardly been used for a long time. The end will hardly be felt in sales, but it is a symbol that Netflix is breaking with old traditions. This now also applies to dealing with the long-tolerated naysayers.