The latest news for Netflix isn't good: it was charging for password sharing, and that has not gone as smoothly as the company could have wished, claims a new report. Subscribers in Peru who were opted into new password-sharing restrictions said they were confused by Netflix's loose definition of the term "household" and complained that it also hasn't clarified charges to consumers.

Rest of World, a global tech news site, informally surveyed more than a dozen Netflix users in Peru after the company announced in March that it would ask customers in that country — as well as in Chile and Costa Rica — to pay extra for sharing account passwords with people outside their homes. Central and South America rank lowest in revenue per user for Netflix, so there's some explanation for why the markets were selected.

Most of those polled by Rest of World in Peru reported to have not gotten uniform messaging regarding the new charges, some two months since the policy was first announced. Some subscribers began to see the price hike and subsequently canceled their Netflix accounts. But others could, they said, post their accounts cross-households free of charge because they had ignored the message over the new policy.

An anonymous Netflix customer service representative has reportedly told Rest of World that when a customer called in to state that a member of their immediate household was using the account from another location, the rep was instructed to inform that person that that person could continue to use the account through a verification code without paying for an additional stream. This basically meant that those who called for help could disregard the policy and continue to share the subscription without any consequences. The rep added that members of their team often get confused about the policy too. The company issued the following statement about the rollout: "This has been progressive.

A Netflix spokesperson commented to TechCrunch, "While we began exploring paid sharing more than 18 months ago, we've been publicly stating for five years that 'A Netflix account is for people who live together in a single household". We notified by e-mail millions of members who are actively sharing an account in these countries, but we're bringing up in-product notifications more slowly than usual given the significance of this change. We are pleased with what we see so far,"

According to Statista, in 2021, Netflix made around US$3.58 billion from its operations across Latin America. That amount represents around 13.4% of the total revenue made by Netflix globally that year, which was about $30 billion.

In Peru, two other individuals using a subscriber's account but residing in another apartment, city or country pay 7.9 soles, which is about $2.99 each per month. It is less expensive than setting up individual Netflix accounts for a subscriber since the price per month on a basic plan in Peru is 24.90 soles, or around $6.80.

While Netflix has long had a policy against sharing passwords, it was never heavily enforced. Actually, Netflix CEO Reed Hastings has in the past said it was a good thing.

However, after the particularly harsh Q1 2022 that saw Netflix's first drop in overall subscribers since 2011, the streaming giant has made it clear that it will charge extra for those that split a subscription across multiple addresses. Approximately 33% of Netflix subscriptions are shared in multiple households, per Leichtman Research Group. Netflix confirmed this in its recent earnings report by saying approximately 100 million households have freeloaders logged in to the streaming service account.

Analysts say the subscriber growth of Netflix is plateauing and the company appears to have reached a cap of 220 million subscribers. Moreover, the streamer has reportedly released about 150 employees following its tragic decline in viewers as the service lost 200,000 customers in the first quarter.

Given the more recent hype over first-hand experience of early adopters with the new feature, Netflix may be forced to rework the password-sharing system before the product's global launch. The firm has scheduled the continued rollout for the end of 2022, simultaneous with a cheaper ad-supported tier.