Netflix Cracks Down on Password Sharing: Families Face Extra Charges To Share Accounts with Non-Household Members

Netflix Password Sharing Face Extra Charge Non-Household Members

By E.Baloyo , Parent Herald May 26, 11:16 am

Photo: (Photo : CHRIS DELMAS / Getty Images)

In a significant move to tackle the issue of password sharing, popular streaming platform Netflix has announced a crackdown on subscribers who share their accounts with non-household members.

Families who have been enjoying the convenience of sharing their Netflix accounts with loved ones outside their households will now face additional charges.

This decision comes as a response to the revenue loss incurred by the practice of password sharing, as well as the growing competition in the streaming industry.

Here's what you need to know about the new measures implemented by Netflix.

Netflix Changing Stance on Password Sharing

According to TIME Magazine, Netflix has acknowledged that over 100 million subscribers globally engage in password sharing.

In April 2022, the company experienced a decline in subscribers for the first time in more than ten years. Consequently, Netflix has been gradually implementing its updated password protocol on a global scale.

Netflix's CEO, Reed Hastings, once viewed password sharing as a positive phenomenon, as it often led to new account subscriptions.

However, with the recent decline in subscriber growth and the rise of competitors in the streaming landscape, the company has had to reevaluate its position.

As per TechHive, the practice of password sharing has been identified as one of the factors contributing to a loss of revenue for Netflix and other streaming platforms.

While the exact financial impact of password sharing on Netflix remains undisclosed, estimates suggest that the practice will cost the streaming giant and pay-TV operators up to $9.1 billion in 2019 alone. This figure is projected to reach a staggering $12.5 billion by 2024. These substantial losses have prompted Netflix to take action and implement stricter measures to address the issue.

With the growing competition in the streaming industry, including the emergence of platforms like Disney+, Apple TV+, Paramount+, HBO Max, and Peacock, Netflix is determined to protect its revenue streams and ensure a level playing field.

The crackdown on password sharing is part of Netflix's strategy to maintain its market position and continue offering a wide variety of engaging content to subscribers.

Netflix Crackdown Begins

As per Game Spot, effective immediately, Netflix will commence the process of sending email notifications to subscribers residing in the United States and other geographical areas who engage in the practice of sharing their accounts with individuals outside their households. The purpose of these emails is to educate users on the new policies and provide instructions on how to transfer profiles to new accounts or pay additional charges to continue sharing with non-household members.

Netflix employs various methods, including IP addresses, device IDs, and account activity analysis, to detect and identify accounts being shared outside the primary account holder's household.

Additionally, the company may request verification of devices by entering a four-digit code sent to the account holder.

The enforcement of these measures signifies a clear shift in Netflix's stance on password sharing. While the company does not explicitly warn users against sharing accounts without paying extra, it is evident that a crackdown is underway.

Netflix has introduced several features and initiatives to address the issue over the past year. These include reduced-priced "sub accounts" for users in certain regions, an "add a home" option allowing subscribers to use their accounts in multiple locations, and a "Profile Transfer" tool to facilitate the transition of shared profiles to new accounts.

However, it is important to note that Netflix still permits account sharing within a single household. Subscribers can continue to enjoy the convenience of accessing their accounts while traveling or between different homes. Families who have been sharing their accounts with non-household members will now face additional charges.

As the streaming landscape continues to evolve, Netflix aims to safeguard its revenue and adapt to the changing dynamics of the industry. Subscribers must familiarize themselves with the new policies and consider their options to ensure uninterrupted access to the platform's vast library of films and TV shows.