Netflix is changing its policy on password sharing – and will start charging people to share accounts. Currently, a Netflix account holder can add up to five profiles to their account. Those profiles will become sub-accounts that cost money starting in early 2023.
Netflix will now only allow one "home" per account, and additional homes will need to pay extra to use the same account, the company announced this week. You can still use the Netflix account while outside of your physical home – on your tablet, laptop or phone – but it will technically be one account, which you can add sub-accounts to.
The streaming platform has already rolled out this model in Argentina, Dominican Republic, Honduras, El Salvador and Guatemala. Customers in those countries pay an extra $2.99 per month to add additional homes to their account. Netflix did not specify if the cost would be the same for the U.S.
Netflix will start rolling out these features more broadly in early 2023. Members with basic plans can add one extra home, standard plans can add up to two extra homes and premium plans can add up to three extra homes.
People who borrow someone else's Netflix password can transfer that Netflix profile to a new account. That means they will see their viewing history and recommendations on their new account.
The profile transfer has several different uses, COO and Chief Product Officer Gregory Peters said during a Netflix earnings call Tuesday. "I mean there's obviously situations where you can imagine like you have a kid at home who is going to go off and become an adult and get their own account, and it supports those ones," he said.
People who shared their passwords with others can now easily create and manage sub-accounts with the new model. "Another component of this, though, is allowing account owners to be able to pay for Netflix for some friend or family, somebody they want to share the service with," Peters said. "And so they're able to create a sub-account, which we're calling extra member, to enable that model, too."
Charging for sub-accounts isn't the only new revenue stream for Netflix launching in 2023. Customers will be able to pay for a basic version of the streaming platform that costs less but comes with ads. Peters said the "Basic with Ads" plan option "will bring in a lot more members," and "lead to a significant incremental revenue and profit stream."
The Basic with Ads planand will cost $7 per month in the U.S., 55% less than Netflix's most popular $15.50-per-month plan, which is ad-free.