Netflix's password crackdown test is confusing users

Netflix has been testing ways to crack down on password sharing in markets outside of the U.S., and early reports indicate that the A/B tests have resulted in a haphazard experience for users.

Netflix said in its recent earnings call that it would start charging an additional fee for users who share passwords with people who live outside of their household. Those tests have begun in South America. According to global tech publication Rest of World, those changes have not been communicated to users in Peru in a uniform way, causing confusion about the new policy and how it's being applied.

While many continue to share their Netflix accounts at no extra cost, the crackdown on only some subscribers has caused a few cancellations, according to Rest of the World. Netflix confirmed to the publication that different subscribers may be paying differing charges.

Netflix's varied rollout is a sign that the company is testing different versions of its password sharing policy as a way to nail down which is the most effective, which is expected given the way the company's well-known A/B testing works. Even something as simple as an icon to express how much a user likes a show took nearly a year of testing to figure what will resonate with users the most.

Netflix first announced it was testing this feature in March in Chile, Costa Rica and Peru, through which users would be able to "add an extra member" for roughly $2 or $3 per month, depending on the country. Netflix said that extra members would get a separate login and password. The new policy is the first time that Netflix is defining “household" as people who live exclusively in the same vicinity as the subscriber, according to Rest of World.

Netflix is testing its password-sharing and pricing changes as it struggles to grow its user base. The company reported that it lost 200,000 subscribers in the most recent quarter, causing its shares to plunge and analysts to question whether Netflix has peaked.