Netflix Inc. is cracking down on customers who share their accounts, introducing an $8 monthly charge in a long-threatened bid to retain customers and stanch a slowdown in subscription growth.
On Tuesday, the video-streaming giant NFLX, -1.93% announced the plan to reduce unauthorized password sharing in its largest market, the U.S., especially among customers who share their logins with friends and family outside their household.
“Your Netflix account is for you and the people you live with your household,” Netflix said in a blog post.
“A Netflix account is meant to be shared in one household (people who live in the same location with the account owner),” the post said. Anyone else must have a separate paid account or be added as a paid “extra member,” the company said.
To share Netflix with users outside of their household, current customers can transfer a profile to a new membership that someone else pays for, or they can buy an extra membership for $7.99 per month in addition the cost of the main subscription.
Netflix has said it will start blocking devices that attempt to access a Netflix account without properly paying. Subscribers will be able to continue to access the service while traveling, by using personal devices or by logging onto a TV at a hotel, for instance.
During its most recent earnings call, Netflix co-Chief Executive Greg Peters described the reaction of users in countries where the company has already cracked down on password sharing. “It’s very much like a price increase — we see an initial cancel reaction,” he said. “And then we build out of that, both in terms of membership and revenue as borrowers sign up for their own Netflix accounts and existing members purchase that extra member facility for folks that they want to share it with.”
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