Netflix is testing a new way to combat password sharing in Argentina, El Salvador, Guatemala, Honduras, and the Dominican Republic (as first reported Bloomberg). A support page for Netflix in Honduras makes it clear that the test will charge users extra fees if they use an account on a TV or device connected to a TV at a location outside of their primary household for more than two weeks. Each additional house will cost an additional 219 pesos per month, per house in Argentina (US$1.17) and $2.99 everywhere else.
According to Netflix, in test areas, subscriber accounts have a main “home” where they can access Netflix on all devices in the home, as well as travel and use Netflix on laptops and mobile devices elsewhere without additional step. The test will allow users to purchase additional “homes”, which they choose to add or skip to use the service on TV screens.
The support page explains the process:
Add an additional house
Starting August 22, 2022, when you tune in to Netflix on a TV outside your home, you’ll have the option to add the additional home for an additional fee per month.
If you’re only using this TV for a limited time, you can watch Netflix for up to 2 weeks at no additional cost as long as your account hasn’t been used there before. After this time, the TV will be blocked unless you add the additional house.
The support pages also go into more detail about how Netflix determines a “home,” defined as “a physical location — like your home — where you can use your Netflix on any of your devices.”
Further down the page, it explains what Netflix does to detect usage in another “household.”
How Netflix detects homes
We use information such as IP addresses, device identifiers and account activity.
If you’re using a device in your included home and still see a message that too many homes are using your account, you can:
Make sure the device is connected to the same internet connection as the other devices in the house.
Make sure the device is not connected to a VPN, proxy or any other unblocking service.
Netflix explains that your use of Netflix on a TV outside your home while “traveling” is eligible at no additional cost for up to two weeks, “as long as your account has not been previously used there.” This is allowed once per location per year.
In these countries, Netflix is also working on a feature that will allow you to track where your account is being used and restrict access. If you’re on the Basic plan, you can add one more house, if you’re on the Standard plan, you can add up to two, and on Premium, you can add up to three.
“It’s great that our members love Netflix movies and TV shows so much that they want to share them more widely,” Chengyi Long, director of product innovation at Netflix, said in a statement. “But today’s widespread account sharing between households compromises our long-term ability to invest in and improve our service.”
This expands on Netflix’s existing test that pushes subscribers in Costa Rica, Peru and Colombia to pay extra for users living away from home. Netflix currently charges users an additional CLP 2,380 ($2.52) in Chile, $2.99 in Costa Rica, and PEN 7.9 ($2.02) in Peru for adding up to two additional “sub-accounts” to an existing account. The company has also started experimenting with a profile transfer tool that’s supposed to make it easier for someone to transfer their recommendations, watch history, and My List. It’s a way for the platform to passively entice password-sharers to open a new account or access a sub-account.
In May, a report from Rest of the world revealed confusion among subscribers who are part of the test in Peru. Some subscribers were apparently unsure of Netflix’s definition of a “household,” while others were able to bypass a prompt intended to validate account owners.
Netflix first announced it would test ways to charge for password sharing in March, just weeks after announcing price increases for US customers. Netflix is also working on an ad-supported subscription option and just last week said it would partner with Microsoft to power its ads. The company has clear reasons to seek new ways to generate revenue; in April, after a subscriber boom at the start of the pandemic, he announced in April that he had lost subscribers for the first time in more than a decade. The company’s next quarterly earnings report will be released on Tuesday afternoon.
Update July 18, 7:30 p.m. ET: Added additional information from the Netflix support pages on how options work, whether they appear for users connecting to a TV or a device connected to a TV, how Netflix defines a “home” and what information Netflix tracks to detect where and how subscribers use the service.
Disclosure: The edge recently produced a series with Netflix.