Netflix has started cracking down on password sharing in South Africa and won’t offer the ability to add extra members to accounts at a reduced fee.
That is according to a shareholder letter that accompanied the video streaming giant’s results for the second quarter of 2023.
Netflix revealed its revenue had increased in each region where it started limiting accounts to single households, with new sign-ups exceeding cancellations.
“In May, we expanded paid sharing to over 100 countries, which account for over 80% of our revenue,” Netflix said.
“The cancel reaction was low, and while we’re still in the early stages of monetisation, we’re seeing healthy conversion of borrower households into full-paying Netflix memberships as well as the uptake of our extra member feature.”
The new policy helped the streaming service add 5.9 million paying customers between April 2023 and June 2023.
Data collected by Antenna previously suggested the policy was paying off in the US, where Netflix had its four biggest single days of sign-ups in at least four and a half years.
Although Netflix has started disallowing the use of a single account in multiple locations, an extra member feature lets subscribers add additional sub-accounts for less than a full subscription.
In the US, Netflix charges $7.99 (R143) for an extra member instead of $15.49 (R277) for a Standard account. (Rand conversions exclude sales taxes and currency conversion fees.)
To support the password crackdown, Netflix uses a combination of IP addresses, device IDs, and account activity to create a primary household location.
If it detects that the account is used in another location, it sends a notification to the user, like the one below, asking them to set their primary location.
While Netflix was expected to launch the extra member feature in South Africa, the shareholders’ letter suggests otherwise.
Netflix said it would start to address account sharing between households in almost all the countries that don’t yet have the policy in place, starting Wednesday, 19 July 2023.
“In these markets, we’re not offering an extra member option,” Netflix stated.
The streaming service said it had recently cut prices in a “good number” of those countries and that Netflix adoption was still relatively low in “many of them”.
“So we have plenty of runway without creating additional complexity,” the streaming service stated.
South Africa is not among the countries where prices were reduced. In fact, Netflix increased South African prices on Standard and Premium accounts in October 2021.
In fairness, Netflix has not increased the prices of its Mobile and Basic plans despite the US dollar’s strength and the rand’s weakness.
Netflix said that households borrowing Netflix could transfer existing profiles to new and existing accounts, a feature it recently rolled out globally.
The video streaming service has already started sending emails to the South African subscribers that it has detected are sharing their accounts outside one household, informing them of the new account-sharing policy.
Using the same Netflix account while travelling
Netflix has argued that widespread sharing undermined its ability to invest in new movies and TV shows, and build its business.
It should be emphasised that users residing within the same household can still use the same Netflix account while travelling.
To do so, users with “trusted” devices must connect to the same Internet connection that the primary household uses for Netflix and stream some content at least once every 31 days.
Untrusted devices that log into the Netflix account will need to enter a code sent to the account holder.
They can then use Netflix for seven days before being prompted for a new code.
Reports suggest that subscribers can only request two codes per month, which means untrusted devices will only be able to stream up to 14 days in a month.