Netflix’s password-sharing crackdown isn’t going well – and that's good news for you

Good news, Netflix subscribers: the streamer’s clampdown on your Netflix password-sharing has reportedly gotten off to a rocky start – and that could mean a delayed rollout of surcharges globally. 

Earlier in the year, Netflix unveiled a pilot program that began charging certain customers in Chile, Costa Rica and Peru an additional fee – currently around $2.99 / £2.50 / AU$4 – for sharing their account passwords with anyone outside of the bill-paying household. The trial remains confined to those South American countries, but Netflix has been vocal about its plan to expand this password-sharing surcharge worldwide in the “short to mid-term”.

But a recent report from Rest of World suggests the experiment, at least in Peru, isn’t running smoothly, with test subjects crying foul over the way said surcharges have been announced, policed and implemented. 

According to the publication, which surveyed more than a dozen affected subscribers, the majority of those involved in the trial have been left confused by Netflix’s loose definition of “household” and frustrated by a lack of clarity over whether they qualify for the additional fee. 

In cases where subscribers have been charged for sharing passwords with individuals outside of the bill-paying household, some say they were never formally informed by Netflix of the policy change, despite the trial commencing more than two months ago. 

The nature of the test also seems to vary on a case-by-case basis. Other subscribers claim, for instance, that they did receive account verification prompts but ignored them without penalty, while others say the password-sharing fees have taken effect as expected.

In response to the confusion, Netflix gave the following statement to both TechCrunch and The Verge: “While we started working on paid sharing over 18 months ago, we have been clear for five years that ‘A Netflix account is for people who live together in a single household’. The millions of members who are actively sharing an account in these countries have been notified by email, but given the importance of this change, we are ramping up in-product notifications more slowly. We’re pleased with the response to date.”

The need to “ramp up in-product notifications” suggests the streamer will be making an active effort to better clarify the parameters of the experiment to those involved, though it’s clear that the password-sharing surcharges themselves are here to stay – at least for subscribers in Chile, Costa Rica and Peru. 

Incidentally, both Central and South America represent Netflix's least lucrative regions when it comes to revenue generated per user, so it makes sense that the company would trial such an ambitious – and controversial – business model change in these countries. 

However, given the evident confusion surrounding these password-sharing surcharges in their current state – despite the streamer's insistence that it's "pleased with the response" – we don’t anticipate Netflix will move to implement them in other markets for a while yet. 

There’s no knowing just how long that “while” might be, but judging by the fragility of the company's US subscriber base right now, Netflix needs to be sure that these surcharges are introduced in the most effective way possible.

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