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Netflix may begin charging a fee for additional profiles appearing on accounts beginning next year.
During its quarterly earnings call on Tuesday, Netflix said it may introduce the fee for every additional user profile that appears in the ‘who’s watching’ window that opens when first logging onto the site.
The measure was first floated back in April after a dreadful earnings report, according to the New York Post, and comes after Netflix has tried to find ways to keep users from sharing accounts without driving them away from the platform.
Based on pilots of the possible program that have been carried out in Latin America, the fees in the US could be between $3 and $4.
Netflix also shared its first good news this year, announcing this week that it added 2.4million subscribers in Q3 after the success of the serial killer drama Dahmer.
Netflix will begin charging up to $4 for each additional profile appearing on every account beginning next year
On Netflix, a single account can host up to five ‘profiles’, each individually named and curated for one person
Netflix characterized the new idea as a ‘thoughtful’ way to solve the account sharing problem which has plagued them for years.
‘We’ve landed on a thoughtful approach to monetize account sharing and we’ll begin rolling this out more broadly starting in early 2023,’ Netflix said in its announcement.
‘After listening to consumer feedback, we are going to offer the ability for sharers to manage their devices more easily and to create sub-accounts, if they want to pay for family or friends.’
Though Netflix has always officially required that users do not share their passwords with other users, previously little has been done to enforce the rule.
Reports show that account sharing costs Netflix about $6billion per year, according to the Post.
Over the summer Netflix experimented with charging fees for additional profiles, testing the idea in Latin America where password sharing was a particularly rampant problem.
The wide-scale rollout of the move now has the potential to make or break Netflix, which has been struggling to find a way to shore up its plummeting profits while maintaining its subscription based revenue platform.
Analysts have said that Netflix is doing everything it can to avoid subjecting users to advertisements or selling their data, but many predict it is only a matter of time before the firm is forced to turn to that.
Netflix’s share price has plummeted over 65% since the start of the year following the announcement of its 200k subscriber loss in April. By the end of Q2 another 970,000 had fled the platform.
Netflix has previously blamed widespread abuse of password sharing by users as one of the primary causes of its flagging subscription numbers, saying that over 100million households are taking advantage of accounts being paid for by others.
In addition to the new profile fee idea, this week Netflix also introduced a feature called called Profile Transfer, which lets users easily migrate their profile to a new account.
It means users’ favorites, recommendations and viewing history are salvaged when profile owners start a Netflix account of their own.
Netflix says the tool lets profile holders easily transfer their profile from the account of someone they’re no longer in contact with – such as an ex-boyfriend.
But it also encourages people with profiles on Netflix to start up – and pay for – their own account rather than ‘freeloading’ off someone else’s.
Netflix said the ‘much requested’ feature is now rolling out to all users around the world, and that an email will be sent as soon as it’s available for each account.
The platform is also rolling out an ad-based subscription option beginning in November which will cost $6.99 per month.
Netflix originally allowed for multiple profiles on an account so that multiple members of a household, such as children, can enjoy content without having to start their own Netflix account and pay the monthly fee.
But there was nothing to stop that account from being used across multiple households, even though the Netflix terms of service say that users of an account must live in the same household.
In effect, it meant that five people living under five different addresses can have their own profile under one account.
That deprives Netflix from a potential revenue source, and ‘undermines our long term ability to invest in and improve our service’, Netflix said.
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