Netflix is Preparing For Its Dreaded Password Sharing Crackdown But Details Are Scarce

As more about Netflix's password sharing plan come to light, the less is clear about what the changes actually looks like for customers.

In this photo illustration a hand seen holding a padlock and in the background the logo of Netflix on the computer screen.
Netflix is under lock and key for password sharers. SOPA Images/LightRocket via Gett

Netflix (NFLX) plans to launch its password sharing crackdown in the U.S. in the coming months, after testing a fee in Latin America. It updated it website with some details on how it will prevent password sharing, and the Streamable, a site covering the streaming industry, reported additional plans. But as more information come to light, the less is clear about what the changes will actually look like for customers.

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The streaming platform says about 100 million people use someone else’s Netflix password, including 30 million in the U.S. and Canada—statistics that align with independent reports. Netflix has 231 million total subscribers as of last month, so converting some of the 100 million password sharers into subscribers represents a huge possible revenue boost for the company. More than 70 percent of password sharers would be willing to pay full price for the service if they could no longer use the shared credentials, according to a Horowitz report published Jan. 17.

Under the company’s new rules, users must choose a primary location—usually a home—for their Netflix account. Devices on that wifi network will be able to access Netflix, and all those devices must open the site and watch something every 31 days to remain active. If a device is blocked for missing this watch period, a user must contact Netflix, the Streamable reported.

Subscribers trying to watch Netflix from outside the primary location—like on a train or at a hotel—may be blocked. If this is the case, they can request a temporary verification code be sent to the primary account holder’s email or phone. The code must be entered within 15 seconds, and they’ll gain access for seven days. If a user misses the 15-second window, they can get another code. It is unclear if a user can request this code more than once.

Users can transfer their profiles to new accounts so they don’t lose their watch history and recommendations, making it easier for Netflix to convince users their own, full-priced accounts are worth paying for.

Many Netflix users on Twitter are up in arms over the plans. “You shouldn’t have to jump through hoops to use your own service,” one Twitter user said.

 

When contacted for comment, Netflix declined to answer the Observer’s questions but pointed to its trials in Chile, Costa Rica, and Peru as a guide. Netflix tested the password sharing fee at $2.99 per account, which allows a user to add two sub-accounts with distinctive usernames and passwords, according to TechCrunch. The company will use device identification and IP addresses rather than location data to track users. It is unclear how many devices can log into a sub-account.

Netflix is Preparing For Its Dreaded Password Sharing Crackdown But Details Are Scarce