Netflix Intensifies Its Crackdown on Password Sharing
Latin Americans were outraged by the new charges and threatened to abandon the platform.
Hundreds of Netflix subscribers in Latin America discovered they had been locked out of their accounts on their TVs in late August. These customers were asked to pay an extra price after logging back in. Netflix previously revealed that it was testing a passcode crackdown in Argentina, El Salvador, Guatemala, Honduras, and the Dominican Republic as phase 2 of a larger rollout.
In this most recent test, a member won't be charged extra as long as they use Netflix at the account holder's "home," which is the actual address where the profile is registered. However, they will need to buy a membership for another place if they intend to use it for an extended period somewhere else.
After the United States, Canada, and Australia, with much more than 4.5 million subscribers as of 2020, Argentina has the 4th-largest household penetration rate for Netflix worldwide, as per Comparitech, a consumer technology research platform. Users in Argentina were particularly critical of the cost experiment's declaration. More than in any other nation, internet users in Argentina were vocal on social networks as anti-Netflix jokes, hashtags, and articles spread. By spreading the hashtag #ChauNetflix (#ByeNetflix), a parody of the platform's regional #CheNetflix Twitter advertising campaign, many vowed to abandon Netflix as a whole.
There isn't much proof, according to Rest of the World, that the protest in Argentina led to widespread Netflix cancellations. The lengthy economic problems of the nation, though, could be what finally jeopardizes the user base of the streaming service.
According to Joaquin Serpe, a representative of the Global Emergent Media Lab, subscription costs effectively increase when the value of the Argentine peso declines since they are denominated in U.S. dollars. Argentine customers are especially susceptible to price increases due to monthly constraints on the amount of US dollars they may save and credit card spending restrictions on foreign currency. Even members of the educated middle class are experiencing various forms of economic precarity, according to Serpe.
Ten Netflix users in Argentina were interviewed by Rest of World a few weeks after the price strategy went into force. Many of the users felt the move was antagonistic and left the service. Although not all consumers in the nation are now impacted by the regulation, several quickly terminated their membership after learning of the declaration. Within the next year, additional fees might apply to all Netflix users, however, Latin America will continue to serve as the policy's beta region.
Customers in Argentina expressed concern to Rest of World about the fact that Netflix bills for memberships in US currency. However, the cost of a second "home" shows on Netflix may have taken into consideration Argentines' price sensitivity. In all other nations, the pilot charge is $2.99; in Argentina, it is 219 pesos ($1.50). Nevertheless, the Argentine cost rises to 381 pesos ($2.62) as a result of taxes levied by the government on international trade, and the dollar price rises as a result of inflation, which is predicted to reach a height of 95% by the latter of this year. The typical monthly salary in Argentina is about $250.
Although Netflix declined to address the particular economic challenges faced by its customers in Argentina, it did clarify in a message to the Rest of the World that it was trying its password-sharing rules in the region. Kumiko Hidaka, Netflix's director of worldwide technology and product communication, said to Rest of World, "We desire to do it right."
In Peru, Chile, and Costa Rica early this year, the streaming service tried out the same password enforcement. The firm claimed that the latest regulations were intended to commercialize the habit of password sharing and, in turn, recover yearly lost income in its April 2022 quarterly letter to shareholders. Millions of people are reportedly utilizing another household's account at any given time. Simultaneous with this new pilot, Netflix continues its original price policy experiments in five other Latin American and Caribbean nations.
This, according to experts, suggests Netflix may be experimenting with different price structures across the area and monitoring customer reactions to fine-tune its lengthy pricing plan. Following feedback from consumers in Peru, Chile, and Costa Rica, the firm changed its pricing model, switching from charging for extra "homes" rather than particular "members" outside of the user's household. Additionally, there is a budget for traveling with computers and smartphone devices.
Many Argentine customers felt the adjustments fell short and protested the price rise outright before any revisions were made. In the days after Netflix announced its new policy, outraged users used the hashtag #ChauNetflix to denounce it.
A person who identified themselves as being based in Argentina on Twitter said, "I would like to make it plain that I'm unsubscribing since I don't agree with the modifications." When comparing Netflix to other services offered in the nation, a customer going by the name of Ral Britos wrote: "They enable you to view [their material] anywhere you are and don't charge you more for it."
Customers who believed the services weren't worth the additional cost, although being able to pay it, were also interviewed by Rest of World. Many users choose to stop using the platform without sharing their choice on social media.
Paz Tibiletti, a journalist residing in Buenos Aires, told Rest of World that it was difficult for her to locate worthwhile content. A local cinema technician named Andrés Grabois unsubscribed because he thought the measure was very harsh.
He chose to continue with his HBO+ membership and view another video via Stremio, a free streaming platform, stating to Rest of World that "the content was poor."
Some users notified Rest of World that their accounts had not changed and that they can keep sharing them without paying any more fees.
According to representatives of Argentina's federal media and communications regulator, Enacom, the government is unable to control the policies of Netflix and other internet streaming providers. In contrast, Netflix and other digital providers "shouldn't renegotiate agreements unilaterally, particularly considering the crisis our nation is through," according to Gustavo López, vice president of Enacom, in a July interview.
Based on secrecy out of concern for career implications, a source with Netflix's business in Argentina told Rest of World that the outrage expressed on social networks did not result in a mass departure. The streaming firm is undoubtedly considering this as it gets ready to introduce an upgraded version of the policy throughout the rest of Latin America and even beyond. As Netflix continues to test in the area to hone its password-sharing policy, the customer reaction to the pilot in Argentina is probably a source of information.
According to Guillermo Mastrini, a professor ", they are attempting to demonstrate this strategy in various countries and they're going to implement one that causes the smallest harm for Netflix globally." He issued a warning that, due to the particular local circumstances of Argentina, the information Netflix receives into member reactions may not be easily transferable to other regions. "I believe Argentina is a horrible nation to investigate this [strategy] given our irrational economy. For other nations, it won't make sense, he added.