$3 Password Sharing Charge Per Additional Out-of-Home User Might Cost Netflix 13% of US Subscribers

$3 Password Sharing Charge Per Additional Out-of-Home User Might Cost Netflix 13% of US Subscribers

During the first-quarter earnings, Netflix decided to cut down on password sharing. And more crucially, to profit from those more users, became further evident. As Netflix considers how to monetize users who share passwords with other homes. A new study finds that Americans’ reactions to a $3 monthly price per additional out-of-home user differ. Combining Netflix’s high rates and now shifting in policy over password sharing might cause the company some of its subscribers.

Let us take a look at whether a password crackdown will be profitable or not.

Password Sharing will cost Netflix subscribers

Aluma’s research indicated that if Netflix charges $3 per month for extra out-of-home users, 13 percent of adult Netflix subscribers would terminate the service. While 12 percent would likely add at least one out-of-home user who would otherwise go unmonetized.

Netflix has begun testing a new format in three Latin American countries for $3 per month per additional home.

However, while 13% of poll respondents stated they would cancel, Aluma’s Greeson estimates that only around half of those would. The analyst has an excellent idea of how intention translates to action after 20 years of consumer research.

Furthermore, “Netflix is a highly regarded service relative to its competitors,” Greeson says, stressing that it’s one of the criteria he evaluates, implying that the number of people who really cancel will be fewer.

According to Aluma, individuals who will add at least one $3 per month user are more likely to do so since two-thirds of those sharing passwords borrow from immediate family members, such as a father to son or vice versa.

ALSO READ: Globally Most-Watched Netflix Movie for Last Week Is 0% Rated On Rotten Tomatoes, Top Critics Call It “Emotionally Bankrupt”

If users are charged more for Netflix password sharing, it may stimulate interest in a lower-cost ad-supported tier. Both will be launching in 2022 or 2023. Greeson feels, “For some, the ad-supported tier will make sense.”

He also mentions that the $3/month may interest some people or their own $15/month subscription. But the main idea is that freeloaders have several choices for not abusing the service.

What are your thoughts on the increase in Netflix’s fees? Do share your answers with us in the comments.

4 thoughts on “$3 Password Sharing Charge Per Additional Out-of-Home User Might Cost Netflix 13% of US Subscribers

  1. Reply
    May 7, 2022 at 9:17 pm

    What Netflix fails to realize is that I already pay extra for screen sharing. I don’t have a 4k tv but I pay for the premium account because I can have up to 4 screens at a time. If you charge me an additional $3 I’ll just stop sharing and drop my account to basic or cancel, depending on how pissed I feel if/when it happens. So you won’t gain $3 from me but lose $10/20.
    I already pay for Prime, Hulu, Fubo, and Disney. For $20/month I could trade netflix for Apple, HBO, AND Paramount.

    1. Reply
      May 9, 2022 at 2:42 am

      I think most people feel the same way you do. There are so many options today and Netflix is not special and double the cost. You are already paying for 4 Streaming channels so why should it matter if it is a different location. Netflix will tank when they start this.

  2. Reply
    May 9, 2022 at 7:34 pm

    I want to know when will they start the $3 charge. I hope they don’t just charge it on one of our future bills without announcing it’s started in USA.

  3. Reply
    Sharon Hite
    May 12, 2022 at 10:44 pm

    When I travel, I use my Netflix account. Will I be charged $3 everytime I sign into my account from a different location?

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