Netflix’s Password-Sharing Crackdown Trial Sees Limited Success

by Shelby Scott

Netflix has struggled to catch a win recently, with the streaming giant’s downfall beginning during Q1 after losing 200,000 subscribers. Following that nasty blow, the company announced plans to introduce ad-supported content to the platform. Afterward, the company then made a decision to introduce a password-sharing crackdown. Fortunately, American Netflix subscribers should be able to avoid the crackdown through the summer. However, currently, the company is running a trial of its password sharing crackdown in three Latin American countries. And, in yet another blow, Netflix is seeing limited success.

Company Loses More Subscribers Following Password Crackdown

Currently, the three countries experiencing the password sharing crackdown trial are Peru, Costa Rica, and Chile. As per Newsweek, Netflix subscribers in those countries are subject to additional charges for adding up to two subaccounts that are located outside of their immediate household.

In theory, that’s how the crackdown should be functioning. However, Rest of World reports that that’s not exactly the case. Since introducing the crackdown trial, Peruvian Netflix users claim the messaging surrounding the update is unclear. As such, not all of the country’s users have undergone the same policy adjustments.

In Peru specifically, the outlet states there have been two significant responses to Netflix’s latest update. Some subscribers have chosen to cancel their subscriptions after seeing an upcharge. Meanwhile, many users were not made aware of the change, while others heard about it without seeing enforcement.

Overall, Latin American subscribers feel as though there is a massive lack of clarity regarding Netflix’s definition of a household. However, a Netflix representative countered the argument, stating the company has been clear about its definition for years.

Netflix Employees Remain ‘Unclear’ About New Policy Changes

Despite increasing uncertainty regarding the specifications of Netflix’s password sharing crackdown, one company representative argued the definition of a household, within the platform’s terms, has remained the same for about five years.

In addressing the argument, they said, “While we started working on paid sharing over 18 months ago, we have been clear for five years that ‘A Netflix account is for people who live together in a single household.”

They further said, “The millions of members who are actively sharing an account in these countries have been notified by email, but given the importance of this change, we are ramping up in-product notifications more slowly. We’re pleased with the response to date.”

In contrast, one Netflix employee, who chose to remain anonymous, said that some of the company’s customer service representatives remain unclear about the new policy changes. They also cannot pinpoint why some users have seen additional charges amid the crackdown while others haven’t.

The overwhelmingly confused results of the password sharing crackdown have even caught the attention of Peru’s consumer protection agency. The outlet states the agency has issued a recommendation that Netflix create clearer channels of communication regarding the password sharing crackdown.