Image Source: The Verge
Netflix is intensifying its efforts to charge users for using shared accounts in an effort to find new revenue streams after experiencing years of rapid growth.
According to the streaming service, a “second home” will cost users in five countries in Central and South America an additional $2.99 a month. It also issued a warning that the international crackdown on password sharing would occur.
The most recent disclosure was made prior to the findings’ Tuesday deadline. The business disclosed its first subscriber decline in more than a decade earlier this year. The company is required to publish an update on its members along with its financial results, and it is anticipated that this report will highlight the decline in subscriber growth.
It is a sharp reversal for a firm that for years appeared to be growing unabated as it transformed how people consume entertainment globally and upended the traditional television and movie theater industries.
When the pandemic struck in 2020, its status as a worldwide powerhouse was solidified when people flocked to its events while stranded at home with few other options for entertainment.
But as pre-pandemic habits resume, Netflix is having trouble luring new subscribers while also keeping hold of the devotion of current ones.
People in places like the UK have canceled their memberships due to price increases, while consumers in the US and other countries are being enticed to switch by a slew of new competitors like Disney, many of whom used to sell their films and television shows to Netflix.
Increase in cost of shared Netflix accounts
According to research, more people are opening accounts to watch particular shows before closing them.
Families’ reactions to the company’s demand for more money for shared accounts are unclear.
In March, Netflix announced that certain households, including those in Chile, would be charged for the addition of an “extra member.”
The most recent change, which will take effect in Argentina, Honduras, Guatemala, El Salvador, and the Dominican Republic starting next month, frames the request slightly differently and asks for $2.99 for every extra home.
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It stated that users could alter their accounts at any moment to remove their residences.
According to Netflix, it plans to test out several fee structures before implementing them globally as early as the end of this year.
The company has stated that it will test a less expensive ads-based service in addition to cracking down on password sharing in an effort to extract more money from its current audiences.