Netflix’s Plan To Crackdown On Password Sharing Could Bring In An Extra $1.6 Billion Every Year

The days of “borrowing” your parents’ Netflix account might be coming to an end.

The streaming service is testing a feature that will make primary account subscribers pay a fee if they want to allow additional, outside-the-residence users to access the account. As Variety reports, “Customers will be able to add up to two Extra Member accounts for about $2-$3/month each, on top of their regular monthly fee.” The password-sharing crackdown test will be launched in Chile, Costa Rica and Peru, followed by a global rollout. If everything goes as Netflix hopes, the new feature will bring in an additional $1.6 billion in annual revenue.

According to estimates by Cowen & Co. analysts, if Netflix rolls the program out globally it could add an incremental $1.6 billion in global revenue annually, or about 4% upside to the firm’s 2023 revenue projection of $38.8 billion. The firm’s estimate assumes that about half of non-paying Netflix password-sharing households will become paying members; further, the model predicts that of those, about half will opt to sign up for their own paid account.

With an extra $1.6 billion lying around, maybe Netflix (which hasn’t ruled out ad-supported plans, either) can bring back The Baby-Sitters Club? Instead, it will probably go to funding 17 more Ryan Murphy shows.

(Via Variety)