Netflix has expanded its ongoing crackdown on password sharing to South Africa after it admitted that the controversial move is having a positive effect on revenues and subscription numbers in markets where it’s already happened.
The US-based streaming entertainment giant has launched paid-for plans specifically for customers who want to share their login credentials with family or friends. The sharing of passwords has become an industry-wide problem, with MultiChoice Group’s DStv recently clamping down on the practice, a move the company has also claimed drove up paying subscriptions.
Netflix had already introduced its paid-for sharing options in about 100 countries, representing some 80% of its revenue base. South Africa was not among them, but the company has now included the country in its crackdown.
South African users have started receiving emails from Netflix regarding the sharing of their accounts
“Revenue in each region [where password sharing has been restricted] is now higher than pre-launch, with sign-ups already exceeding cancellations,” Netflix said a letter to shareholders alongside its financial report for the second quarter, published on Wednesday.
South African users have started receiving emails from Netflix regarding the sharing of their accounts. Netflix advises account holders to set up a “household” profile to help Netflix identify the profiles and devices it should associate with their account.
Household profiles can only be set from an internet-connected TV. If a user does not set up their household profile, Netflix will auto-create one based on “IP address, device IDs and account activity”. Any subscriber using an account whose household they are not a part of can have their profile transferred to a new account, which they can then pay for.
There are currently four pricing plans available in South Africa. The table below shows the various pricing options and the associated features.
It emerged earlier this week that Netflix is phasing out the cheapest ad-free plans in the US and UK, forcing new and returning subscribers either to move up to a more expensive ad-free plan or down to a cheaper ad-supported tier. Current subscriptions are not affected by the changes.
All plans in South Africa are ad-free, but recent changes to US and UK pricing structures suggest ad-supported tiers may be in the pipeline locally as well. Being cheaper than the equivalent ad-free offerings, they boost revenue by attracting new sign-ups while adding a second revenue stream for Netflix, which is “working hard to scale the business”.
A spokesman for Netflix in South Africa did not respond to questions about the new ad-supported tiers, and whether these will be introduced locally, too.