Annoyed Users Cancel Netflix Subscriptions in Password Sharing Test, Telecom News, ET Telecom


New Delhi: A Netflix experiment to crack down on sharing passwords outside the home has left users perplexed as the streaming giant hiked subscription fees for those users, forcing some of them to cancel their subscriptions.

In March, Netflix quietly rolled out an experiment to customers in three small Latin American markets, asking them to pay extra when sharing their account passwords away from home.

The streaming giant announced the new password sharing policy in Peru, Chile and Costa Rica.

According to global tech news site Rest of World, for some Netflix users, the price increase was enough to convince them to cancel their accounts altogether.

“Others continue to share their accounts between households without any notification of the policy change or have ignored the new rule without facing enforcement,” the report said.

Overall, the lack of clarity on how Netflix determines a “household” and the different charges imposed on different customers left test subscribers confused, “risking action by consumer regulators.”

As OTT platforms witness an increase in subscriptions amid the pandemic, the issue of password sharing has also grown and resulted in slower user growth for several players.

Major OTT giants, including Netflix, are working tirelessly to solve the problem of password sharing.

Netflix’s terms of service have always stated that subscribers are not allowed to share accounts outside of their household, but the platform has never applied any additional charges for violating the policy.

For the first time, the company is defining “household” as exclusively the people a subscriber lives with, the report said.

Netflix representatives told Rest of the World that it knows some subscribers understand “household” to mean immediate family, but that it has always defined the term as people living in the same building.

The company said different subscribers might pay different fees.

Peru’s consumer rights agency, the National Institute for the Defense of Free Competition and the Protection of Intellectual Property (Indecopi), said “the different fees could be considered a way to arbitrarily discriminate against users.” .

Netflix saw its stock plummet 20% after reporting a loss of 2 lakh paid subscribers in the first quarter of 2022, its first loss of subscribers in more than a decade.

Additionally, it forecasts a global paid subscriber loss of 20 lakh for the April to June quarter (Q2).

Netflix is ​​rapidly losing long-term subscribers. According to a survey report by The Information, new data shows that people who have subscribed to Netflix for more than three years accounted for 13% of cancellations in the first quarter of this year.

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