Netflix's plan to charge people for sharing passwords is already a mess before it's even begun, report suggests

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Netflix's plan to charge people for sharing passwords is already a mess before it's even begun, report suggests
A scene from Netflix's "Stranger Things" season three.Netflix
  • Netflix said it would charge users who let people outside their households use their account.
  • It has been trialing this new policy in Costa Rica, Chile, and Peru.
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Netflix has been trialing its upcoming crackdown on password-sharing in three Latin American countries — but with limited success so far, Rest of World reports.

In April, Netflix reported its first subscriber loss in over a decade, and it said people sharing the passwords to their accounts was in part responsible.

The streaming giant started testing a stricter enforcement policy in March to prevent people from sharing passwords with people outside their "household" in Costa Rica, Chile, and Peru.

Under the terms of this test, subscribers are charged a monthly fee — the equivalent of around $2 to $3 in each country's local currency, Netflix told Insider — to add an extra member account for someone living outside their household.

Rest of World spoke with more than a dozen Netflix subscribers in Peru who said the messaging around the policy change was confusing, and that they hadn't been subject to any enforcement that charged them for sharing passwords.

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Central to consumer confusion has been how Netflix defines "household," Rest of World reports.

A Netflix representative told Rest of World that while the company was aware some consumers thought it meant anyone in an account holder's immediate family, the company defines a household as people who share a physical domicile. Netflix did not immediately respond when contacted for comment by Insider about Rest of World's report.

Rest of World also reported that Netflix had run into resistance from state consumer agencies in Costa Rica, Peru, and Chile. Peru's consumer agency recommended that Netflix work to clarify its definition of "household" with customers, Rest of World reported.

The same agency told Rest of World that Netflix's new policy of charging users for sharing passwords could lead to arbitrary discrimination against consumers.

Rest of World reported that an anonymous Netflix customer-service representative said she and other customer-service reps were confused about what to tell account holders when asked about the new policy.

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The customer-service rep said that if a customer called to assert that a member of their household was using the account from a different location, she was instructed to tell them that the person could continue to use the account via a verification code without incurring an extra charge.

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