Netflix has taken action to clamp down on password sharing in South Africa, announcing that it will no longer permit the addition of extra members to accounts at a discounted rate.

The popular movie streaming platform revealed that its revenue increased across all regions where it implemented restrictions, with new sign-ups surpassing cancellations. In May, Netflix expanded its paid sharing limitations to over 100 countries, accounting for more than 80% of its revenue.

The company stated, "The reaction to cancellations was minimal, and though we are still in the early stages of monetization, we are observing a healthy conversion of borrower households to full-paying Netflix memberships, along with a positive response to our extra member feature."

During the period from April 2023 to June 2023, this new policy contributed to a significant addition of 5.9 million paying members to the streaming service.

Data from Antenna suggested that this approach was proving successful in the United States, where Netflix experienced its four biggest single days of sign-ups in over four and a half years.

Although Netflix is prohibiting the use of a single account across different locations, they introduced an "extra member" feature, enabling customers to add subaccounts at a reduced rate compared to a full membership.

In the United States, an additional member costs $7.99 (R143) instead of the standard account price of $15.49 (R277) (excluding sales taxes and currency conversion fees for Rand conversions).

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Netflix employs various data, including IP addresses, device IDs, and account behaviour, to create a primary household location in order to enforce the crackdown on password sharing. When an account is detected as being used outside of its primary location, the user receives a notification asking them to set their primary location.

Initially, an additional member option was planned to be launched in South Africa; however, the shareholders' letter now reveals a different plan. Netflix is extending its account-sharing policy to almost all countries that had not previously implemented it, effective July 19, 2023.

"We are not offering an additional member option in these markets," stated Netflix.

The streaming service mentioned that it has recently reduced pricing in "a good number" of these countries, but adoption of Netflix remains low in "many of them." As a result, Netflix believes it has plenty of room for growth without the added complexity of the additional member option.

South Africa is not among the countries where prices have been reduced. In fact, Netflix raised the prices of its standard and premium accounts in South Africa in October 2021. However, the prices of mobile and basic plans have remained unchanged.

Families sharing a Netflix account can transfer current profiles to new and existing accounts, a feature that has been introduced globally.

Netflix has already started notifying South African members caught sharing their accounts across multiple households of the new account-sharing policy.

The move to crack down on password sharing is driven by Netflix's desire to invest in new content and expand its business, as widespread sharing has impacted its ability to do so.

It's important to note that customers living in the same household can still use the same Netflix account while travelling. However, "trusted" devices must connect to the same internet connection used by the principal household for Netflix and stream content at least once every 31 days to retain access.

On the other hand, untrusted devices attempting to access the Netflix account will need to input a code issued to the account holder. These devices will be allowed to watch content on the platform for seven days before needing a new code. Reports indicate that members can request only two codes per month, meaning untrusted devices can only stream for 14 days each month.