Netflix could start charging people an extra fee if they share their account login and passwords with people who do not live at the same address, experts have said. Earlier this year it launched a trial in Latin America, asking subscribers to pay an additional £2.50 to add an additional household to their account, with the company reiterating its intention to double down on tackling account sharing between households.
Digital i estimates that there are around 19 million accounts that are shared across more than one household in Netflix's European territories. The biggest levels of account sharing are in Poland and Italy, with nearly half of all accounts being shared in the former. In the UK, one quarter of all accounts are shared.
To tackle account sharing, Netflix may seek to expand its trial and ask all subscribers to pay an additional fee to add a household to their account, says Digital i. If it were able to convince half of the account sharers in its key European territories to pay the extra £2.50 for a second home, then the company could be looking at an increase in revenue of approximately £245m per year, Digital i data shows.
Alternatively, it may wish to encourage account sharers to drop onto an ad-tier package at a lower cost, but with added value to Netflix from selling advertisements. On October 13, Netflix announced that it would be rolling out a new low-cost subscription tier launching in the UK on November 3 at 4pm GMT.
Named Basic with Adverts, the new plan will become the company’s cheapest available package at £4.99, costing £2 a month less than the Basic tier and £4 less than the Standard tier that is currently the most popular option. However, those that sign up to the new tier will be subjected to watching approximately five minutes of adverts per each hour of viewing.
Matt Ross, Product Manager at Digital i said: “Motivating those who share accounts across multiple households to pay extra for an additional household, or to drop into the new ad tier, if they already can share across four screens with no ads at no extra cost will be a challenge."
