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Netflix May Scare Away Subscribers With $2 to $3 Sharing Fee

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Netflix announced Wednesday that it is testing charging a fee to subscribers who share their accounts with people who don’t live with them. The streaming giant is now getting a lot more expensive in more ways than one.

Netflix has long been relaxed about users sharing passwords with family or friends, but stock prices recently took a dive after quarterly results showed a cooling subscriber growth trend.

Meanwhile, streaming TV competition has been heating up, particularly with Disney+, while costs of producing highly coveted original series have also been increasing.

According to Netflix movies product innovation director Chengyi Long, Netflix will begin offering subscribers in Chile, Costa Rica, and Peru the option to add up to two people to “sub-accounts” for a monthly fee of $2 to $3 starting this week.

We recognize people have many entertainment options, hence we want to make any new features useful and flexible for the members, whose subscriptions help to fund our programming,” Long said.

Sharing Netflix outside households

The TV streaming giant is working on ways to allow subscribers to share “outside their households, as well as pay a bit more,” she explained.

The company said that people already sharing account information will be able to transfer it to their new sub-accounts. Before making changes anywhere else, Long said the company will study the new model’s utility in the three countries.

According to Netflix, the company ended last year with 221.8 million subscribers, just below target, after booming during the Coronavirus lockdown that kept people at home and on the platform.

The outlook for the TV streaming giants’ first quarter of 2022 doesn’t look much better, with the firm expecting to add only 2.5 million more subscribers.

A majority of the 8.3 million Netflix movies subscriptions added at the end of last year, according to the streaming service, came from outside North America.

According to a recent announcement, Netflix has raised its subscription prices in the United States from $9.99 to $19.99. In Canada, the streaming giant raised fees from $14.99 to $16.49 for a standard plan.

Every time Netflix raises its monthly fees, bearish investors fear that subscribers will flee. Additionally, Netflix has posted disappointing subscriber additions in recent quarters, as the early Coronavirus lockdowns led to a surge in early signups that disappeared in 2021.

As a result, the service may appear fragile and price-sensitive. This price increase and sharing rules will surely send subscribers to the exits.

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