Netflix charging Australians extra for password sharing as new crackdown commences

After months of testing and launches in other parts of the world, Netflix has today announced their crackdown on password sharing is happening in Australia with users looking to share their passwords being asked to pay more to continue with their extra user accounts.

Beginning today, Netflix's Australian customers will receive an email outlining the changes which use the IP address of your home to determine which devices are at the main household, and which are in another location.

EXPLAINED: How changes to Netflix password sharing affect you

This is a blow to the many families who share Netflix login details and passwords to their older parents, or to children who have more recently moved out of home. Likewise there is a large amount of users who share passwords purely to split the cost of a Netflix account each month.

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A new "Extra member" option is being offered to users on the Standard or Premium plans, allowing one or two (plan dependent) users to have cheaper access to their own Netflix account. An Extra member account will cost $7.99 per month, and work on just one device in another location.

The Streaming giant said earlier this year there are "over 100 million households are sharing accounts", and the reason for this crackdown was that password sharing could be directly "impacting our ability to invest in great new TV and films."

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In simple terms, Netflix isn't getting paid for everyone watching, and they need that to change.

Signs are strong that it will, with the trial in Latin America and more recently the crackdown in Canada and New Zealand which began in February showing direct results on the company's bottom line.

Netflix said in a recent shareholder letter that "we see a cancel reaction in each market when we announce the news, which impacts near term member growth."

However, that negative response is offset shortly after by a lift in overall subscriber numbers, "as borrowers start to activate their own accounts and existing members add "extra member" accounts, we see increased acquisition and revenue.

For example, in Canada, which we believe is a reliable predictor for the US, our paid membership base is now larger than prior to the launch of paid sharing and revenue growth has accelerated and is now growing faster than in the US".

Backlash is expected in Australia, with users likely to follow the lead of upset Canadian users taking to social media to express their disgust.

Nothing will change though, Netflix is set on implementing this globally to end the sharing of passwords forever.

Nine, the publisher of this website, owns streaming service Stan, which is a competitor to Netflix.

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