You might finally get kicked out of your ex's Netflix account. But it's not you, and neither is it them; it's Netflix. Netflix is OK with password sharing as long as it's with people you live with.
After implementing its plan in a few countries globally, Netflix is finally cracking down on password sharing in the US. So how is Netflix doing that, and what changes has it implemented? Let's find out.
Password Sharing Is One of Netflix's Biggest Problems
Netflix has tackled the issue of password sharing after slow revenue growth in Q1 2022, partly due to account sharing. In a 2022 shareholder letter from Netflix, the streaming platform estimates that its service is being shared with more than 100 million households.
However, account sharing isn't the company's only problem. Despite having 232.5 million active subscribers, Netflix also lost 200,000 subscribers during the first three months of 2022 after estimating that it would gain around 2.5 million new customers, affecting its bottom line.
Because members on Netflix's Standard and Premium plans have long been able to share their accounts with the people they live with, Netflix believes this has caused confusion about when and how you can share your account.
According to a Netflix blog post, the company notes that this makes it challenging to invest in new content. As a result, the service started its global crackdown on account sharing in February 2023, beginning with New Zealand, Spain, Canada, and Portugal. Netflix expanded its crackdown to the US in May 2023. The goal is to prevent further losses and hopefully encourage more people to sign up for the service.
How Netflix Is Cracking Down on Password Sharing
Netflix wants to monetize password sharing to reduce the number of people freeloading on its service and add more subscribers. So, between March 2022 and February 2023, Netflix rolled out a handful of features to give members more control over how their accounts are used.
The first feature is the option to Add an Extra Member. This feature allows members of the Standard and Premium plans to add up to two sub-accounts for people who live outside their homes. Each account gets its own profile, personalized recommendations, and login credentials. Below are the costs per additional member in qualifying countries:
- 2,380 CLP in Chile
- $2.99 in Costa Rica
- 7.9 PEN in Peru
- AD$7.99 in Canada
- Euro 5.99 in Spain
- Euro 3.99 in Portugal
- NZD $7.99 in New Zealand
- USD $7.99 in the US.
The second feature is called Transfer Profile to a New Account. Members on Netflix's Basic, Standard, and Premium plans can let someone using their account transfer their profile information to either a new account or an extra member sub-account. This essentially allows the migrating profile to keep its account content, including viewing history, My List content, and personalized recommendations.
The third feature is called Set primary location, which essentially helps Netflix keep track of how your account is being used. We assume it will make it easier for Netflix to crack down on password sharing, although it's unclear how. Manage account access and devices, the fourth feature, is self-explanatory: it helps Netflix account owners manage who can use their accounts and the devices they stream on.
Finally, Watch while you travel ensures that you don't miss out on your favorite Netflix content while traveling. It allows you to catch up on your favorite movies and TV shows on your phone, iPad, or TV anywhere in the world.
Will Netflix's Plan to Stop People Sharing Passwords Work?
Netflix's plan to monetize on password sharing may work to some extent, but not entirely, as members will still be able to share their passwords with people in other homes. This is because Netflix isn't forcing members to buy the added features. And while some people might wonder if it's illegal to share your Netflix password, the company hasn't punished anyone for continuing to share their accounts. More importantly, the features are only available in select countries at the time of writing.
Likewise, Netflix hasn't mentioned anything about adding limitations to members' accounts to avoid account sharing. Netflix will need to be careful, though. Users are already upset with the service for canceling fan-favorite shows. If Netflix doesn't play its cards right, it could lose subscribers. With that said, Netflix's executives have already expressed that the service is expecting a "cancel reaction" due to its decision to end password sharing.
Furthermore, Netflix prices are on the higher end, which is part of the reason people share their accounts in the first place. The company introduced a Basic with Ads subscription plan, but that might not be enough to encourage people to subscribe.
Netflix Has a Long Way to Go
People share accounts because not everyone thinks Netflix's premium plan is worth it. Therefore, Netflix has its work cut out for it and won't see any significant changes unless it implements tighter restrictions on members. That's why the service has to give more thought to its plans if it wants to tackle the issue of account sharing more effectively.