Is Netflix cracking down on password sharing? What subscribers need to know

Netflix CEO Reed Hastings famously said password sharing “wasn’t really an issue” in 2016, but now it seems he’s changing his mind. According to an Aura survey from 2021, 53% of Americans admit that they share login information with people outside of their main household.

In fact, Hastings said this week that Netflix will soon be looking at “sharing monetization” to boost subscriber growth, such as cracking down on password sharing.

Read more: Netflix is ​​looking to the ad-supported tier and targeting password-sharing as total subscribers shrink and inventory drops

So if you share your Netflix password with friends and family outside of your household, or you enjoy accessing another shared Netflix account, here’s what you need to know about what Netflix does about password sharing.

Does Netflix allow sharing?

Netflix deplores sharing passwords to allow people outside the account holder’s home to sign in to watch “Stranger Things,” but it hasn’t really implemented that — until now.

Netflix has three monthly subscription options: Basic ($9.99), Standard ($15.49) and Premium ($19.99). And for all three levels of service in the US, an unlimited number of devices can be used to sign in with a single account — but only a certain number of users can simultaneously stream the service under one account at a time, a representative told Netflix Market Watch. The amount of simultaneous streams allowed varies by plan, such as two screens streaming at the same time on the Standard plan, or up to four simultaneously streaming under the Premium plan.

And a single Netflix account can have up to five profiles on it, which are used to separate viewing suggestions and watchlists between profiles, as well as giving parents the ability to enact maturity level restrictions for children’s accounts.

And while Netflix’s terms of service state that “the account may not be shared with individuals outside your household,” the company admitted to MarketWatch that it doesn’t really enforce the policy outside of bad actors who have attempted to exploit the service by reselling login information, for example. .

This means that password sharers have been able to split a single Netflix subscription between siblings, friends or other significant other at home and in different locations over the years, the only deterrent being simultaneous streaming. But that could change over the next year or so.

How many Netflix users share passwords?

Netflix estimates that 100 million people use their shared login information to watch the streaming service, rather than paying for their own account. The executives described cutting off password sharing as a “big opportunity” in the contributor’s letter, because “these families are already watching Netflix and enjoying our service.” One tactic: Charging streaming devices a few extra dollars to share their account with someone outside their home — a feature the company is trying in some Latin American markets — is less expensive than that of a friend or relative when they open a separate Netflix account for $9.99. to $19.99.

What does Netflix do about password sharing?

It looks like a crackdown is coming. Netflix has already tested ways to limit password sharing in some Latin American markets, such as testing surcharges for accounts used at addresses not tied to the main account holder. These add-ons are in the $2 to $3 per month range, and will run when people try to use the Netflix account associated with another title.

“Our primary approach is to ask our members to pay a little bit more to share the service outside of their homes,” Netflix chief product officer Greg Peters said in a video interview with JP Morgan analyst Doug Anmouth. Peters went on to give an example, if you share your Netflix account with your brother in another state, you will be required to pay a fee. “We’re trying to find a balanced approach here, a consumer-centric approach,” he continued.

Opinion: Do you share your Netflix password? Not for long…

Or, existing Netflix subscribers can enable users outside of their household to transfer their existing profiles, such as viewing history and personalized recommendations, to their new account.

Netflix hasn’t publicly specified how it can enforce any upcoming restrictions on password-sharing rules, but the current test being conducted in Chile, Costa Rica and Peru checks the main account holder through an IP address (also known as a string of numbers that identifies any device on a network), not a location Geographically, a Netflix spokesperson told MarketWatch. This is partly because an app based on the main account’s geolocation will run into problems if a user tries to use their Netflix account while away from home on a mobile device, such as a phone or laptop.

When will any new password-sharing rules apply in the US?

It’s not clear exactly what password-sharing rules will be implemented in the US at this time, but at least some action appears inevitable based on various comments from Netflix executives during the company’s latest earnings report. However, it looks like the timeline for any new restrictions on password sharing will be a year or so down the road.

Peters, chief product officer, said it will take some time for the company to implement paid account sharing across all markets. “I think we’ll spend a year or so iterating, then deploying, all until we launch this solution globally, including in markets like the US.”

But the news has already prompted many consumers to assess how much money they spend on the streaming service each month, leading analysts to question whether we’ve reached peak streaming.

Read more: Netflix is ​​giving up subscribers and CNN+ will shut down amid competition from Disney, Hulu, HBO, Amazon Prime and Apple. Have we finally reached peak broadcasting?

And: After the collapse of Netflix and CNN+, Wall Street is wondering if streaming is a good investment

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