Netflix clamps down on password sharing in four more countries

Netflix (NFLX) has extended its crackdown on password sharing to Canada, New Zealand, Portugal and Spain. Users in these countries will now have to pay to give people they don’t live with access to their account after similar rules were made in Latin America last year.

Under the new rules, subscribers to Netflix’s Standard or Premium plans will be able to pay for up to two people outside of their household to use their account. The cost of adding a new person will be $7.99 Canadian dollars ($5.96), $7.99 New Zealand dollars ($5.09), and €3.99 ($4.30) and €5.99 ($6.45) in Portugal and Spain respectively.

Netflix started introducing the change last year in Chile, Costa Rica, Peru, Argentina, the Dominican Republic, El Salvador, Guatemala, and Honduras. It plans to roll out the new rules “more broadly” sometime before March, it said in a letter to shareholders last month.

The streaming giant, which suffered heavy subscriber losses last year, said in a blog post-Wednesday that password sharing hurt its revenues and therefore limited its ability to invest in new content.

It estimates that more than 100 million households worldwide share an account.

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“Over the last year, we’ve been exploring different approaches to address this issue in Latin America, and we’re now ready to roll them out more broadly in the coming months, starting today in Canada, New Zealand, Portugal and Spain,” Netflix said in the post.

The company, which has turned a blind eye to password sharing for a number of years, said there was “confusion” among users about “when and how” they could share their accounts.

As part of the latest changes, users in the four countries will be asked to set a “primary location,” which ensures that all members of a household watch from the same account. A new “manage access and devices” page will allow members to more easily control who has access.

Users will still be able to access their accounts from their tablets or phones, or from new TVs when they travel, Netflix said.

In its letter to shareholders, Netflix said that, based on its experience in Latin America, it expected a proportion of users to cancel their subscriptions once the changes were rolled out, but forecasts that the overall number of users would grow over time.

Netflix shares plunged more than 50% last year due to concerns about streaming subscription fatigue and increased competition from the likes of Disney (DIS) and Apple (AAPL).

But the stock has rallied 24% since the start of the year, lifted by the falling value of the US dollar. Netflix generated over half of its revenue in 2022 from outside the United States, so whenever the dollar loses value its international sales and earnings get a boost once translated back into the currency.