Plans by Netflix to introduce a new paid sharing service, as part of a crackdown on users accessing Netflix for free, were temporarily put on hold.
Netflix told investors on Tuesday that its new paid sharing service, which forces subscribers to pay extra to share their access outside of their households, resulted in a “cancel reaction” in those countries where the new measures are already in force.
As a result, Netflix only reported subscriber growth of 1.75 million, less than the 2.3 million originally expected by industry analysts.
Paid sharing was introduced earlier this year in Canada, New Zealand, Spain and Portugal. But after an initial wave of cancellations, paid subscriber numbers in Canada are now higher than it was before the paid sharing service was introduced. It expects this trend to replicated in other countries, which is why it says it will push ahead with the plans.
This means that the reprieve for those enjoying free access to someone else’s Netflix account is only temporary: Netflix says it will resume rollout of paid sharing in this three month period.
What are the new restrictions to stop password sharing?
- Netflix will identify your home wi-fi or internet connection, i.e. the one you use to watch Netflix on your TV. It’ll look at other devices connecting to Netflix on your account, to see if they are also on the same internet connection.
- When someone signs into your Netflix account from a device that Netflix thinks is not associated with your “Netflix household”, or if your account is accessed persistently from a location outside of your household, it may ask you to verify that device before it can be used to watch Netflix.
- Netflix may suddenly ask for a PIN. The PIN is sent to the main account holder via email or phone. The PIN will need to be entered onto the device that triggered the PIN request within 15 minutes. The idea behind this is that if the Netflix password is shared with someone outside of the household, that isn’t enough time to get in touch with the account holder before the device is deactivated.
Alternatively, subscribers can opt-in to a paid sharing plan, or non-household users can sign up for their own Netflix account.
Following the rollout of its ‘with ads’ plans, Netflix also promised a upgrade to some of the features offered. Netflix told investors it’ll be upgrading the feature set of its ads plan to include 1080p versus 720p video quality and two concurrent streams in all 12 ads markets – starting with Canada and Spain.
We believe these enhancements will make our offering even more attractive to a broader set of consumers and further strengthen engagement for existing and new subscribers to the ads plan.