Netflix Password Sharing Crackdown Hits Snag In Trial Run

Netflix has begun testing efforts to crack down on password sharing in Peru, Chile, and Costa Rica. The move comes as the streaming service has lost subscribers.

The tests have not gone smoothly.

According to Statista, Netflix lost 200,000 subscribers between the fourth quarter of 2021 and the first quarter of 2022, when the company reported 221.64 million subscribers. Netflix predicted it could lose another 2 million subscribers this spring quarter.

Users in Peru told tech news site Rest of World that they did not receive uniform messaging about the new charges. They said workers, one of whom who talked anonymously, are also unsure about what to say to consumers about the change in policy.

In the initial rollout, the company is trying a plan where Standard and Premium subscribers can add up to two people they do not live with for $2.99. It also allows users to "transfer profile information either to a new account or an Extra Member sub-account."

Still, the company says that it will work to "understand the utility of these two features for members in these three countries before making changes anywhere else in the world."

After the drop in subscribers, the company has massive employee layoffs. A recent update to Netflix employee guidelines also issued warnings for them to "spend our members' money wisely."

According to its terms of use, the previous lax attitude towards password sharing "created some confusion about when and how Netflix can be shared." The streaming service also said password sharing impacted its ability to invest in new content for viewers.