Netflix users in Argentina have flooded social media with protests about the streamer’s rollout of a crackdown on password sharing.
Up against declining subscriptions and a sinking share price, Netflix this year began accelerating its efforts to boost revenue by squelching the widespread, and up to now little-challenged, practice of sharing passwords to let friends and family get a free ride. Netflix has estimated that as many as 100 million subscribers worldwide engage in this practice.
After early-year tests of an “add extra member” approach in Chile, Costa Rica and Peru created confusion and frustration, Netflix announced in July that it would initiate a different, “add-a-home” approach starting in August in Argentina, the Dominican Republic, El Salvador, Guatemala and Honduras.
Under the policy, each Netflix account, whatever the plan it is on, includes just one home where the service can be used on all devices for the core subscription price. Members of that household can also watch Netflix on tablets, laptops or mobile phones when outside the main home, although there are apparently limits on that. Use by additional homes must be purchased for an extra per-month fee that varies by market.
When the policy kicked in last month, thousands of users in those countries were logged out of their Netflix accounts on their smart TVs, and told they would have to pay an extra fee to enable use by additional households.
That set off an uproar in Argentina, in particular — which is Netflix’s fourth-largest market, with 4.5 million subscribers as of 2020, according to Comparitech estimates.
Many Argentinians threatened to cancel the service, posting anti-Netflix memes and hashtags that went viral — including #ChauNetflix (#ByeNetflix), a takeoff on Netflix’s promotional #CheNetflix promotional campaign on Twitter, noted Rest of World.
Netflix has again confirmed that it is testing password sharing policies in Latin American countries (which have high rates of sharing) with the goal of optimizing their approach and pricing, but has not commented on how many subscribers in Argentina or elsewhere have cancelled as a result of the new fees.
Argentinians are up against soaring inflation and general economic woes. Because Netflix subs are priced in U.S. dollars, their cost effectively rises as the country’s peso loses value; and Argentinians also face restrictions on using U.S. and other foreign currencies, Global Emergent Media Lab member Joaquin Serpe told Rest of the World.
In Argentina, Netflix’s added-home fee is the equivalent of $1.50, versus $2.99 in other countries, but government taxes on foreign transactions push the fee up to $2.62 now, and inflation will push it up further, notes the report.
In other words, in addition to higher-than-average sharing rates, it’s possible that Netflix may have chosen Argentina and other countries under particularly intense financial stress, where subscription pricing and average revenue per user (ARPU) are already low, to learn under worst-case scenarios before rolling out elsewhere.