June 12, 2023, 10:40 am | Read time: 4 minutes
Netflix is currently introducing a fee for shared account usage in many countries. Despite criticism from users, the concept seems to be working for the streaming service, at least according to recent figures from the U.S.
Netflix is one of the most popular streaming services in the world. In the first quarter of 2023, the number of paying Netflix subscribers was approximately 232.5 million—with an emphasis on paying. The actual number is likely much higher, as many users have been sharing an account for years. This so-called account sharing was not only tolerated by Netflix but even endorsed with slogans like “Love is sharing a password.” However, since 2022, the company has been gradually introducing fees for shared accounts—most recently in Germany. This has led to some strong criticism from users on social platforms. Nevertheless, the strategy seems to be paying off for Netflix.
Netflix Introduces Fee for Account Sharing
The streaming service estimates that before the introduction of extra fees, about 100 million households used other people’s login data. This represents a significant amount of potential revenue that Netflix was missing out on. This is particularly relevant because Netflix has been operating at a loss for years and is increasingly in debt—a not uncommon practice in the U.S. Currently, the debt stands at over $15 billion. Netflix is therefore interested in converting those who have been using the service for free through others into paying subscribers.
To achieve this, the company is gradually introducing additional fees in more and more countries. Those living in the same household can continue to use a shared Netflix account, depending on the subscription plan. However, anyone regularly accessing Netflix from a different network must either get their own account or pay an extra fee of 4.99 euros per month. This essentially creates a sub-account to the existing one, allowing users to carry over their viewing habits and favorites.
Comprehensive information about the new fee for account sharing can be found in our overview article.
Netflix Eliminates Popular Subscription Plan Without Replacement; Customers Must Switch
Netflix Upgrades Ad-Supported Plan and Delays Introduction of Account-Sharing Fees
What Are the Consequences of the New Netflix Fee for Account Sharing?
So far, the new fee applies mainly in South America and Europe. Netflix has now announced its introduction in the U.S., the streaming service’s most important market. And indeed, a noticeable effect was seen immediately after the announcement.
According to the well-known analytics firm Antenna, nearly 300,000 people signed up for a new Netflix subscription in the first four days following the announcement. On two of those days, the number of new subscriptions even exceeded 100,000. A similarly significant increase was last seen at the start of the COVID-19 pandemic. Whether these new subscriptions are for the additional account, which costs $7.99 in the U.S., or if users prefer a completely new and separate subscription is not known.
According to Antenna, the number of new subscriptions significantly exceeds the number of cancellations. This at least indicates an initial trend in how the Netflix fee for account sharing is being received. However, a long-term development cannot yet be predicted based on the data.
Further Measures by Netflix
Additionally, Netflix is refining its general subscription model and has been offering a cheaper plan since the end of 2022. For the lower fee, users accept advertisements. The launch was somewhat bumpy, however—TECHBOOK reported. And at least in Germany, the new subscription’s great success is still awaited, as a recent TECHBOOK survey shows. However, acceptance is significantly broader in the important U.S. market.
Moreover, Netflix is ending its founding business, the rental of DVDs, this year. The company was founded in 1997 as a mail-order rental and sales service. In the early 2010s, Netflix became the streaming service we know today.