The days of getting your family member or friend to share their Netflix password seem to be numbered.
Forbes reports that the streaming giant is locking down on a new way to charge users for giving their account information out to people who are outside of their households. To bring the plan to direct action, Netflix is currently testing a password-sharing fee in Chile, Costa Rica, and Peru.
The Possible New Standard
How the new method would work is that in addition to Netflix’s monthly fee, users would have the option “to add up to two extra-member accounts for about $2 to $3 per month each.”
If customers are to move forward with the new policy, it could add $1.6 billion to the company’s revenue, according to estimates by Cowen & Co. analysts. As Netflix is in a stagnant stage of membership, it’s a move that has the potential to either spark growth or chase customers away to other streaming platforms.
“We think Netflix’s recent efforts reflect a natural progression across more mature markets, and could add incremental subs and [revenue] if the test is rolled out globally,” Blackledge wrote via Seeking Alpha, according to Forbes.
Will Other Streaming Competitors Follow Suit?
Since Netflix is still early in its testing, it’s not clear yet whether or not it’s a favorable decision for other platforms to hop on board. The announcement appears to stem from a stint in bringing in new members.
“I suspect that a crackdown will result in five percent subscriber growth, partially or fully offset by an increase in churn, and it won’t impact financials much, if at all,” Wedbush Securities analyst Michael Pachter told The Hollywood Reporter. “I think they are doing this now because growth has stalled to a crawl.”
Taking into consideration of Netflix’s new plan possibly going from testing to reality, there are realistically speaking only two ways things can go: Work to their advantage and companies begin to join the wave or completely backfire and competitors get one up.