Netflix rolls out new fees for password sharing in Canada

Netflix is rolling out its new system to crack down on password sharing in Canada, one that will see customers who share their accounts across multiple locations pay an extra $8 a month.

The streaming giant says it will begin notifying Canadian users today by email about limitations on who can access their account outside their household. 

In Canada, the new rules are as follows: An ad-supported plan that can be used by one person on one device in one location will cost $5.99 a month.

The same basic plan without ads will cost $9.99 a month.

Under what the company calls its “standard” plan for $16.99 a month, a user can watch on two devices at the same time, but they must be in the same physical location. If they want to watch in different locations — at a parent’s home and a college-aged child’s dorm room, for example, or between two members of a couple who live apart — there will be an extra fee of $7.99 a month.

The “premium” plan allows four users to watch at once, for $20.99 a month, but it will also have an extra $7.99 fee if those users are in multiple locations. That would bring the monthly price for the most-expensive Netflix package to roughly $28 a month. 

When Netflix launched in Canada in 2010, it cost $7.99 a month and had no formal limitations on the number of devices on the same account, although its selection of titles was much more limited than what was available in other countries for the same price.

The system will require the user to opt-in and decide to add a second user. Accounts will not be automatically billed the extra fee if a second user logs on from a new location, the company told CBC News in a statement.

Netflix did not say when it would begin enforcing the new rules, but in its most recent earnings report it said it planned to roll out the new rules worldwide some time before the end of March.

“Over the last year, we’ve been exploring different approaches to address this issue in Latin America, and we’re now ready to roll them out more broadly in the coming months, starting today in Canada, New Zealand, Portugal and Spain,” the company said.

Once the system is in place, customers will have to set their “primary location” for their devices but they will be able to “still easily watch Netflix on their personal devices or log into a new TV, like at a hotel or holiday rental.” 

100 million password sharers

Netflix has roughly 250 million paying customers around the world, and the company says about 100 million of them currently share their passwords.

The company first announced it would be changing their policy on password sharing at the end of 2022, but didn’t offer any details. Earlier this month, the company’s terms of services were briefly updated in a way that suggested the company was going to be cutting off customers who log in from multiple locations, but Netflix said that was published “accidentally” and would only be the case in certain markets.

WATCH | How free TV has become an unexpected rival to streaming: 

Free, ad supported television offers streaming alternatives

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As consumers cut back on subscriptions and look for alternative ways to consume news and entertainment, free ad-supported streaming television (FAST) services are offering an alternative, with CBC launching its own FAST channel this week.

Consumer pushback to the idea has been swift, and Canadians are among those who don’t like their first look at the new plan.

“With these changes, honestly it’s the perfect excuse to cancel Netflix until they realize what a bad business decision was made,” Netflix user Willem Louw told CBC News on Wednesday.

The resident of Peace River, Alta., says he currently pays for a premium subscription which he shares with his parents, but the added $8 a month will likely be enough to make him cancel. “Compared to the other streaming services out there, there just isn’t enough quality to justify the price points they’re coming up with,” he said.

Technology analyst Ritesh Kotak says the company is banking that most of its current password-sharing customers won’t think that way and will be willing to pay for the service now that they have gotten accustomed to it.

“How many of them are now going to stop subscribing or are they just going to cut off their friends and family from getting access?” he told CBC News in an interview Wednesday. “They’ll end up purchasing an [account].” 

“I think that there’s going to be an initial dip, short term, yes, but long term, I think that they’re going to be OK,” he said.

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