As Netflix has estimated that more than 100 million homes are using the service for free, it plans to charge accounts extra for password sharing.
Netflix reported a drop of nearly 1 million subscribers in the second quarter of this year and shared details of its planned subscription changes.
The streaming service says it will ask subscribers in five Latin American countries to pay an additional $2.99 (£2.50) per month to add a “second home” to their account.
The company also warned that the password-sharing ban would apply globally.
The streaming giant “underestimated” its subscriber losses, warning investors in April that it expects to lose 2 million subscribers.
This is the company’s first loss of subscribers in more than a decade after the company lost about 200,000 subscribers in the first quarter.
This is a dramatic turning point for a company that has achieved unstoppable growth over the years, revolutionizing the way people around the world consume entertainment and shaking up traditional TV and cinema businesses.
Its position as a global mogul was solidified when the 2020 pandemic hit, and people flocked to its shows while locked in a house with few other entertainment options.
But with the return of pre-pandemic habits, Netflix is struggling to attract new subscribers and maintain the loyalty of existing ones.
Netflix says its short-term goal is to “reaccelerate revenue growth” through improved monetization capabilities.
To that end, Netflix shared new details about its ad-supported tier which the company announced earlier this month. This cheaper subscription tier is planned for early 2023.
It is unclear how families will respond to the streaming giant’s request for more money for shared accounts.
Netflix said it plans to experiment with different methods of presenting these charges before rolling them out globally later this year.
Joshua is a multidisciplinary creative and tech enthusiast who seeks to create meaningful experiences that make for a better and more equal world. He is a creative entrepreneur and human rights activist whose work navigates socio-cultural discourse and how it can be used as a vehicle for change.