You’ve probably heard the rumors. Netflix is set to crack down on password sharing in the near future. We examine Netflix’s upcoming “Extra Home fee.”
In recent years, subscription costs for Netflix account holders have become a bit of a running joke. At launch, Netflix’s unlimited plan cost just $99 a year. Today, Netflix subscribers spend between $120 – $240 annually, with many falling on the mid to higher-end given the limitations of the lower-tiered plan.
Still, as Netflix has evolved from a content distributor to a content creator, costs have ballooned and the company is now facing pressure from shareholders to address the loss of 1.2 million subscribers in the last 6 months.
Last week, Netflix said in its earnings call that it will do just that by rolling out an ad-supported plan and account-sharing fees in 2023.
But what does this mean for you?
We’ve got the deets!
What is the Netflix Extra Home fee?
The Netflix Extra Home fee will be a new monthly charge in addition to existing subscription fees for customers who watch Netflix in more than one location at a time. The fee will be applied to all customers who have subscribed to the standard, two-screen, or four-screen plans.
Essentially, it’s a password-sharing fee, but “Extra Home” is a polite way to put it.
What will it cost?
While Netflix has not publicly committed to an exact cost yet, our best guess – based on a post from Netflix Honduras – is somewhere between $2.99 – $5.99, but it could certainly be more.
From Netflix Honduras (accessed on July 27, 2022):
“Beginning August 22, 2022, if your Netflix account is being used on a TV outside of your home, you will need to pay an extra $2.99 per month for each extra home. You will only be charged when you or someone who uses your account chooses to add an extra home – this fee will NOT be automatically charged.”
Again, this doesn’t necessarily mean $2.99 is what US viewers will pay, subscribers in Honduras are billed roughly 30% less than members in the US, but it gives us an idea of where Netflix is going.
How will Netflix determine who should pay?
The company has not given any details about how they will determine who should pay the extra home fee in the US, but a post on the Honduras page titled “Netflix Homes” may give us some insight.
“Your Netflix account includes one home. A home is a physical location – like your house – where you can use your Netflix on any of your devices, and the number of devices you can watch on at the same time depends on your plan.
Beginning August 22, 2022, to use your Netflix account in additional homes, we will ask if you want to add a home for an additional fee per month. We will not automatically add a home and charge the extra fee.”
The post goes on to say that viewers will be able to watch Netflix on their laptop or mobile device while traveling (no limits) and on a TV outside of the home for up to 2 weeks at each location if the same Netflix account has not been used in that location previously.
How to avoid the Extra Home fee
Since Netflix is likely identifying “homes” based on your internet provider and IP address, avoiding these fees will probably be quite challenging if you share passwords with friends and family who live in separate homes.
However, if Netflix’s FAQ is also applicable to US viewers, you’ll still have the ability to avoid the fee without sacrificing mobility.
To avoid the Extra Home fee:
- Sign up for Netflix using your mobile phone number instead of a home address.
- Don’t share your password with anyone outside of your home.
- When traveling, use the Netflix app on your mobile phone instead of the Netflix television app.
- Watch Netflix content with a friend or family member in the same home.
Pros and cons
Pros:
- People with large families who live in more than one location can share costs with one subscription.
- Addresses legitimate shareholder concerns that Netflix is leaving money on the table by turning a blind eye to password sharing.
Cons:
- Additional expense.
Will the Extra Home fee be worth the cost?
While we don’t know what the final cost will be, the concept of Netflix’s new Extra Home fee is not unreasonable.
Netflix’s current pricing structure:
For a monthly subscription of $19.99, users get access to unlimited streaming on up to 4 screens simultaneously in HD and Ultra HD.
This means the Extra Home fee gives viewers the ability to share their subscription with friends and family legitimately, which still nets a monthly savings of between $14 – $17.
Won’t get that with cable.