Netflix's Plan to Charge People for Sharing Passwords is Already a Mess

According to Rest of World, Netflix has been testing its planned crackdown on password sharing in three Latin American countries, with minimal success. Netflix reported its first subscriber drop in almost a decade in April, blaming it in part on users sharing their account passwords.

In March, the streaming giant began testing a tighter enforcement strategy in Costa Rica, Chile, and Peru to restrict customers from sharing passwords with people outside their "household." Subscribers are charged a monthly fee — the equivalent of about $2 to $3 in each country's local currency, according to Netflix, to add an extra member account for someone living outside their household.

More than a dozen Netflix members in Peru told Rest of World that the information surrounding the policy change was ambiguous and that they had not been charged for sharing passwords. According to Rest of World, how Netflix defines "household" has been fundamental to consumer confusion.

According to a Netflix official, while the firm is aware that some customers assumed it included everyone in an account holder's immediate family, the company defines a household as people who share a physical abode. According to Rest of World, Netflix has also encountered opposition from state consumer agencies in Costa Rica, Peru, and Chile. According to Rest of World, Peru's consumer agency advised that Netflix engage with users to clarify its definition of "household."