In March, Netflix quietly conducted a test with customers in three small Latin American markets, asking them to pay more by sharing passwords to their accounts away from home. the giant of streaming announced a new password sharing policy on Peru, Chili Y Costa Rica.
Central and South America have Netflix’s lowest revenue per user, making them particularly vulnerable to price swings, according to global media and entertainment research firm Ampere Analysis.
Currently, Netflix leads the Peruvian market with 41% of streaming subscribers, followed by hbo max Y Disney with around 20%, according to data shared by the aforementioned firm.
Carriers have implemented the policy in countries outside of their big market, so they can’t afford to take a lot of goodwill from lost subscribers. Netflix is likely to use its findings in these three small markets to implement password sharing policies globally, as the company looks to expand its campaign against password sharing later this year.
The new terms and conditions of Netflix
Netflix’s terms of service have always stated that subscribers cannot share accounts outside of their home, but the platform has never imposed additional fees for policy violations.
For the first time, the company defined “household” as exclusive to the people with whom a subscriber lives. The launch of the plan comes after an earnings call that saw Netflix’s first drop in total subscribers since 2011.
Those who use the subscriber’s account but live in another department, city or country will be violating the Terms of Service. For example, to keep the same account in Peru, subscribers can add up to two additional users they do not live with for around S/. 8 (about USD$2) per month.
This option is cheaper than switching to a new account, which costs around S/. 24.90 (about $6.80 USD) per month for the basic plan.
For some, the price increase is enough to convince them to cancel their Netflix account entirely. Others continued to share their accounts between households without any notice of the policy change or ignored the new regulation without matching the app.
In general, the lack of clarity about how Netflix defines “home” and how different rates are charged to different customers has confused subscribers in the trial, at risk of being subject to consumer action regulatory scrutiny.
Many users in Peru are not happy
The Rest of the word newspaper spoke to more than a dozen Netflix consumers in Peru, many of whom said that more than two months after the policy was announced, they had not received constant notification of the new rate and they do not seem to agree with similar policies either.
Carlos Luque, a communication specialist from Lima, shares his account with his parents, brother and girlfriend, all of whom live in different places. None of them have been notified of any changes in policy nor has Luque been charged extraas communicated to Rest of world.
Other users are already feeling the change. Gabriela A., from the Peruvian capital, also shares her account with two friends who live outside of her house. She asked the Rest of World not to use her full name, out of concern that Netflix could subject her to the additional charges that she has managed to avoid so far. “I would like to continue using my ‘hacker’ account for as long as possible,” he said.
While those friends received a notification telling them they had to validate their accounts almost a month ago, they just skipped the message without incident, Y Gabriela continues to pay the same general rate for all three.
Kat Galindo de Lima decided to cancel his Netflix account Y pay for HBO Max instead. “It wasn’t just the new charges,” he told the aforementioned outlet, “I just didn’t enjoy most of his shows anymore.”
Hugo Vilchez, an engineer from Lima, also stopped watching Netflix altogether after the policy change, ending a subscription you shared with friends. All of them continue to jointly share the accounts of hbomax, Amazon-Prime Y Star+.
Lastly, an anonymous Netflix customer service representative told Rest of World that other reps were confused about what to tell account holders when asked about the new policy.
The customer service representative said that if a customer called claiming that a member of their household was using the account from a different location, they were instructed to tell them that that person could continue to use the account through a verification code without incurring an additional charge.