Netflix is eyeing a password-sharing crackdown, but it probably won't happen for another year or two, according to a company executive.
"Just to set your expectations, my belief is that we're going to go through a year or so of iterating and then deploying all of that so that we get that...solution globally launched, including markets like the United States," Netflix Chief Product Officer Greg Peters said in a Tuesday earnings call.
Peters made the statement as the company is preparing to monetize password sharing to help drive revenue. The video-streaming service estimates over 100 million households are currently freeloading off Netflix, including over 30 million households in the US and Canada.
According to Peters, the company has already spent almost two years examining the best way to extract revenue from the password-sharing crowd. Rather than demand these users sign up for their own accounts, the company is instead going to ask the Netflix account holders supplying their logins to fork over more funds.
“So if you've got a sister, let's say, that's living in a different city, you want to share Netflix with her, that's great. We're not trying to shut down that sharing,” Peters said. “But we're going to ask you to pay a bit more to be able to share with her and so that she gets the benefit and the value of the service, but we also get the revenue associated with that viewing.”
To pull this off, Netflix last month debuted a new system that’ll require subscribers to pay an extra $3 per month to allow someone else outside their household to access their account. The company is currently testing the “Add an Extra Member” system in Chile, Costa Rica, and Peru.
“We just did the first big country test. But it will take a while to work this out and to get that balance right,” he added. So it’s possible the system could change, such as the pricing. Netflix currently has 222 million paying subscribers across the globe.
Meanwhile, the company is also considering a cheaper, ad-supported tier to attract more subscribers, but that launch is also a year or two away, says Netflix CEO Reed Hastings.