Netflix’s Password-Sharing Plan Has a Handy Loophole

Update, Tuesday, July 19: After Netflix’s initial threat announcement about limiting password sharing, the streamer is expanding its testing to five Latin American countries — Argentina, El Salvador, Guatemala, Honduras, and the Dominican Republic — according to Bloomberg. The test, you may ask? Well, starting August 22, Netflix will be asking subscribers to pay an extra fee on top of their current subscription plans if their accounts are being used outside their primary home for more than two weeks. The update will not automatically charge you if you’re password sharing, but instead Netflix will send a slightly passive-aggressive in-app notification asking you to pay the extra-house fee (219 pesos, or $1.17, per month in Argentina and $2.99 per month everywhere else) if the service detects your account being used in a location other than your own. The two-week limit allows you to log into your account on other TV’s while on vacation, but if you’re away any longer, you’ll have to either pay up or declare the new location as your primary residence.

However, there is one sort of loophole: For now, using Netflix on various mobile devices like laptops and smartphones will not be counted as an additional charge no matter how long you use it, so go ahead and fire up that AirPlay, baby.

Original story follows.

If you’ve recently (or not so recently) moved out of your parents’ home and expected to keep sharing a Netflix log-in ad infinitum, we have grim news. The largest paid streaming service in the business has decided that its 221 million subscriber accounts are not enough. Netflix decided March 16 that its latest streaming-wars battlefront would be password sharing. In a blog post titled “Paying to Share Netflix Outside Your Household,” the company announced that it’s testing measures that would charge accounts extra for allowing users to stream outside of a given household — a feckless ploy that would target both college students and empty- nester parents everywhere.

Asserting that Netflix’s existing profile options have “created some confusion about when and how Netflix can be shared,” the blog post outlines a test in the next few weeks of two new so-called “features” for members in Chile, Costa Rica, and Peru: The option to add a “sub account” that you have to pay extra for and alternately the ability to transfer profiles to a new account, which would retain your algorithm-juicing history. Vulture asked Netflix why they chose Chile, Costa Rica, and Peru as their testing grounds for this, and the post will be updated if we hear back, but it’s common for them to test products in markets outside the United States. Rather than cut the moochers off, they want to convert subscribers into paying incrementally more for the moochers. In the post, Netflix director of product innovation Chengyi Long argues that password cadging impacts “our ability to invest in great new TV and films for our members.” I would argue that it’s totally fine, actually, and deploying any features that impact my father’s ability to watch Tick, Tick… Boom! on our account are misguided business decisions. But that’s just me.

To be fair, this is just a test. For now. Netflix doesn’t always widely implement the functionalities that they test. And the current cost of adding a subaccount is not terribly high: In Costa Rica, the charge is $3 a month atop the country’s existing Netflix subscription tiers, which start at $9. It’s also not unexpected given that streaming growth across the board is slowing and the company tested an account verification feature almost exactly a year ago. Still, no customer wants to pay more for something they’ve gotten for free for years. Netflix, by the way, raised its prices in the States recently, too.

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