Netflix’s unpopular ‘Password Sharing Fee’, which is going to stop people from sharing passwords with individuals who don’t live with them unless they pay extra – has been delayed, and will be coming to the UK later than expected.
According to Netflix, the company is still “learning” how to implement the new scheme, after some people in countries where it’s already operational have unsubscribed due to the new fees.
But the password sharing fee – which Netflix calls “Paid Sharing” – is still very much on the cards, and a wider rollout is now expected to begin sometime between April and June 2023 (see more details below).
- May 2023 Update: Netflix’s password sharing fee is now live in the UK
And while Netflix only specifically mentioned the US in its letter to shareholders – users in the UK who currently share their Netflix password should be prepared for the new password-sharing scheme to reach our side of the pond in the coming weeks as well.
Why Is Netflix Fighting Password Sharing?
Sharing your Netflix password has long been a practice that lets people seemingly share the cost of the popular American streaming service – either with family members who don’t necessarily live with them, or even among groups of friends.
But password sharing (with people who don’t actually live with you) is against Netflix’s terms of service.
For a long time, however, the company turned a blind eye to account sharing. But with customer numbers around the world declining, Netflix is now reiterating that “A Netflix account is intended for one household”.
According to Netflix, over 100 million households are currently sharing accounts, “impacting our ability to invest in great new TV and films”.
Therefore, in recent months, Netflix started testing various means to combat password sharing – or at least earn from it, which is how the ‘Extra Members’ scheme came to be.
Password Sharing Crackdown Delayed
Back in February, Netflix launched its Paid Sharing / Extra Members programme in four additional countries, after a previous trial in Latin America: Canada, New Zealand, Portugal and Spain.
Following that first expansion, it was expected that other countries – like the US and the UK – will be added to the scheme in Q1 as well.
However, in its letter to shareholders this week, Netflix explains the roll-out had been pushed back to Q2 (between April and June), so Netflix could “learn more about how best to roll out these changes and what matters to members the most”.
According to Netflix, while the company is “pleased” with the results of the Q1 launch of the new Paid Plans scheme, people are particularly concerned with “maintaining travel/watching on the go and the ability to better control access to their accounts as well as transfer profiles to separate accounts”.
Netflix admits then when the password-sharing fee was introduced in new countries, a “cancel reaction” was seen – that is, people have cancelled their Netflix subscriptions in reaction to the new fee.
And while this has caused a reduction in the number of Netflix members in those countries – the numbers started going up again, along with revenue, once ‘Extra Members’ actually joined and started paying for a service they weren’t paying for before.
“For example, in Canada”, Netflix says, “which we believe is a reliable predictor for the US, our paid membership base is now larger than prior to the launch of paid sharing and revenue growth has accelerated and is now growing faster than in the US”.
Netflix’s Extra Members Scheme Explained
Currently, if you are subscribed to Netflix’s “Standard Plan” (£10.99/month in the UK), you can stream content on up to two devices at the same time. The Premium Plan (£15.99/m) lets you stream on up to four devices.
This means that up to four individuals, who might be located in different homes or even in different countries, can watch Netflix at the same time, under the same account. Of course, this also means Netflix gets just one paying subscriber instead of four.
The Extra Members feature lets subscribers add paid sub-accounts for people they don’t live with, each with their own profile, personalized recommendations, login and password.
Furthermore, to help users who will find themselves without a Netflix account once a password is no longer shared with them, Netflix recently launched a new “Profile Transfer” feature, which lets people transfer their Netflix profile – with its personalized recommendations, viewing history and watchlist – to a new paid account.
Standard Plan subscribers can add one extra member, and Premium subscribers can currently add up to 2 extra members.
You’ll note that subscribers on Netflix’s new Basic-with-Ads tier, as well as on the No-Ads Basic tier, can’t add extra members under their primary account.
The upcoming cost for each extra member in the UK isn’t known yet – but it’s currently CAD$7.99 a month per person in Canada, NZD$7.99 in New Zealand, Euro 3.99 in Portugal, and Euro 5.99 in Spain.
How Will Netflix Know I’m Sharing A Password?
As it currently stands, when the ‘Extra Members’ scheme goes live in the UK (and other countries), Netflix’s customers will have to set a ‘Primary Location’ for their account, on their TV at home.
A verification link will then be sent to the account’s email address or phone number.
Netflix will then use your WiFi or your Ethernet broadband connection and IP to ‘lock’ your primary location into one house (according to Netflix, they won’t be using any GPS information).
Even if you don’t actively set a Primary Location – Netflix will do it for you automatically, based on your IP address, device IDs and account activity.
At that point – anyone who tries to use your Netflix account in a different location – will eventually get some sort of notification, and his access will stop working.
Subscribers who don’t have a TV and only watch Netflix on mobile devices – won’t have to set a Primary Location for now.
Can I Watch Netflix When I’m Travelling?
It seems this has been a pain point in other countries, which is one of the reasons Netflix delayed the global roll-out for the password sharing fee.
In general, yes, you will still be able to stream from your Netflix account when you’re traveling (either in the UK or internationally), but there will be a few extra caveats and blocks in place once the ‘Extra Members’ scheme goes live.
If you’re streaming from your own device (a smartphone, tablet, or laptop, for example) – you shouldn’t encounter any issues, AS LONG as you open the Netflix app on your device, while connected to the Wi-Fi network at your primary location, at least once a month – and then when you arrive at the second location.
This means that if you travel for more than a month, without returning home (your ‘Primary Location’) – you might face issues.
If you’re trying to watch Netflix on a new device when you’re traveling – via a hotel TV, for example – you shouldn’t normally face issues, but if the algorithm gets suspicious – you might have to request a ‘temporary code’ via your account, which will let you activate the new device for a limited time.
It’s also unclear yet how this scheme will affect those who stream Netflix with a VPN.
What Will Netflix’s ‘Extra Members’ Get?
As part of the Extra Members scheme, those ‘Extra’ paying members will enjoy many of the same Netflix benefits that the primary account holders enjoy:
- Unlimited access to Netflix’s content
- The ability to watch on any device with a Netflix app (Smart TV, streaming sticks, smartphones, etc.) – but only on one device at a time (so extra members can’t share their account with extra-extra members…)
- The same video quality as the paying, primary member (so HD on the Standard plan and 4K on the Premium Plan)
- Extra members can download content for offline viewing – but only on one smartphone/tablet at a time
- Extra members can only have one profile (so they can’t let other family members create more profiles on their sub-account)
The bottom line is that even though Netflix’s password sharing fee has been delayed – it will be coming in the next few weeks (or months) to the UK, barring any further delays – and viewers should get ready.
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Oren, there was something about the Basic with Ads getting 1080p also. Is this the case that you’ve heard and would that also apply to Basic?
And auto-correct got me, apologies Or.
Indeed – just posted a separate article on that.