Netflix will start charging for password sharing in early 2023, potentially adding up to $3 for each additional user

• Netflix will begin charging for password sharing beginning in early 2023.
• The "extra member" feature will allow additional users to have their own sub-account for a fee.

Lending your Netflix password to your friend, her sister, and her sister's significant other? Your subscription is about to get more expensive.

The streaming giant announced on Tuesday it officially will begin charging for account sharing early next year, after hinting at a crackdown in recent months. In a letter to shareholders, Netflix said the company intends to launch "extra member" sub-accounts in 2023, which will require users to pay an additional fee for friends and family members accessing their account.

While Netflix hasn't specified how much the extra member fees will be in the US, it is likely to follow a beta model already in select Central and South American countries including Costa Rica, where a Netflix sub-account costs $2.99, or one-fourth of the $12 monthly subscription fee, according to The Verge.

The move comes as other streaming companies begin identifying ways to prevent and limit password sharing. Prior to Discovery's acquisition of HBO Max earlier this year, former owner AT&T said it started flagging "rampant abuse" of sharing passwords across multiple households.

"We were thoughtful about how we built the product and that we gave customers enough flexibility, but we don't want to see rampant abuse," AT&T CEO John Stankey said in a call with analysts in April, per Deadline.

According to a March survey from the Leichtman Research Group, an estimated one-third of US Netflix subscribers currently share their log-ins. The new policy could provide helpful revenue for the streamer, which has had a tumultuous year.

Though the company reported on Tuesday it turned a corner and gained more than 2 million new subscribers, it lost subscribers in three consecutive quarters and has struggled against slowing growth.

As it regains momentum, charging for extra members allows the company to start "monetizing all that unpaid viewing," Netflix CFO Spence Neumann said on a call with investors on Tuesday.

CEO Reed Hastings echoed Neumann on the call: "Everything the company is focused on, whether that's on the content side, on marketing, lowering prices to the ad supported, the paid sharing, the thoughtful approach we're doing there lines us up for a good next year."