Netflix's Work to Stop Password Sharing Is Failing

A few months ago, we covered that Netflix was testing out eliminating password sharing in some Latin American countries. Well, that testing is not going according to plan.

Netflix first rolled out this strategy in Costa Rica, Chile, and Peru. The idea was fairly simple. Subscribers are charged an additional monthly fee to add an extra member account for someone living outside their household—the equivalent of around $2 to $3 in each country's local currency. Not that bad of a surcharge. 

But so far, in Peru, sources told a Business Insider affiliate that there seems to be no enforcement of these changes. And that the policy is confusing. A possible wrinkle is that these Latin American countries have a very different view of "households." While Netflix means people who live outside your physical house, they used the term to describe immediate family. This confusion has caused complaints and even problems with state consumer agencies. 

The basic wrinkle was that people were calling in to complain they were being charged when someone in their household was using the service—even if that household extended past their walls. According to a source internally at Netflix, they gave the okay to customer service reps to take the charges off for the complainers, but did add a recurring access code people had to type in on the TV or watching device beforehand, to make it a little harder. And this seems a lot more passive-aggressive. 

This is an interesting conundrum that lots of companies face as they try to implement new policies all over the world. U.S.-centric strategies are not easily applied to other counties, nor are their terms. 

Netflix is facing these issues first, but it doesn't mean they will be the last. They have the unfortunate and fortunate designation of being first in a lot of places, so these growing pains will happen. But it seems like they're going to need to tailor ideas and strategies much more specifically in the future. 

Let us know what you think in the comments.