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Netflix to Seriously Crackdown on Password Sharing in Q1 of 2023

In a move likely very frustrating for subscribers, Netflix aims to crack down on password sharing. Specifically sharing passwords with those not living under one roof. This isn’t the streaming company’s first attempt to curb password sharing on the Netflix platform. But this time, it sounds like the streaming platform means business. In Q1 of 2022, Netflix lost 200,000 subscribers. It was the first subscriber loss for the streaming platform in a decade. The streaming platform shared the info in a shareholder letter.

If there was ever any doubt that Netflix would follow through with its plans to cut down on inter-household password sharing, that is over. But how will Netflix stop password sharing? This time, the streaming platform is getting money involved. Netflix isn’t going to boot the infringing profiles off the main account if it catches someone password sharing. Instead, it’ll just make the account holder pay up. While in Q3 of 2022, the company saw a rise in subscriptions, it still intends to follow through on its password-sharing crackdown in 2023. According to The Wall Street Journal, in 2023, the streamer intends to come down hard on any account sharing. And these efforts to curb sharing will come quickly, according to Netflix’s fourth-quarter earning letter, in the first quarter of the year. Here are the latest updates in Netflix’s attempts to stop users from sharing their passwords and accounts.

Liam Daniel/Netflix

Netflix’s Plan to Stop Password Sharing Forces You to Pay

According to Variety, Netflix is testing a slightly-increased price for accounts with profiles in multiple households. Its testing ground is Chile, Costa Rica, and Peru, which launched the test in March 2022. Netflix is just testing the policy now, but it could eventually take hold in Netflix markets globally.

For accounts with users from multiple households, Netflix will reportedly offer a way to “easily and securely” continue to share the account… for a small price. Account holders can select from an “add an extra member” feature and add up to two friends they don’t live with. And it’ll cost an extra $2.99 per month. That’s certainly less than making someone create a whole new account. But for what it’s worth, Netflix is already one of the most expensive streaming platforms, so it’s no wonder people are moved to password sharing. After recent price hikes, its premium subscription now costs $19.99 in the US. (Amazon’s Prime video, for reference, costs $8.99 per month.)

For those realizing the time has come anyway, Netflix will also release a feature that allows a profile transfer to either a whole new account or an “extra member” account. So someone can move their profile without losing their years of curation.

Netflix Profile Transfers

To ready users for an upcoming crackdown, Netflix has added the option of an easy profile transfer. Very simply, this lets each profile on an account easily become its own account. As Netflix shares in a release:

We’re launching Profile Transfer, a feature that lets people using your account transfer a profile — keeping the personalized recommendations, viewing history, My List, saved games, and other settings — when they start their own membership.  

Netflix also notes, “To transfer a profile, go to the “Transfer Profile” option when you hover over your profile icon in the dropdown menu on the homepage — then simply follow the instruction.” Ostensibly, this feature is nicely asking for those sharing accounts to create their own with ease… Before there are repercussions. This feature is now widely available.

Netflix Lets You Log Out of Individual Devices

In addition to Profile Transfers, Netflix has rolled out a new feature that lets users log out of individual devices. This feature called “Managing Access and Devices” is “a new feature in Account Settings that allows you to view all the recent devices that have streamed from your account and to log out of specific devices with just one click.”

Ostensibly, it’s there in case you forget to log out of a device that you were just using in passing. However, this new update also serves as a further measure by Netflix to cut down on password sharing.

Netflix’s “Add Extra Home” Option for Account Sharing

We learned via The Verge that Netflix also expanded its efforts in the password-sharing fight with “Add Extra Home” tests. Netflix rolled out a test of new anti-account-sharing features in Argentina, El Salvador, Guatemala, Honduras, and the Dominican Republic. In these areas, Netflix’s support notes that users will have to pay an additional fee for use of an account outside their primary household.

In short, Netflix creates an area or “home” that it identifies as a primary household connected to an account. When in their designated home, users can access Netflix across their devices without any interruption. For up to two weeks, users can travel away from their home without issue. But after two weeks, they’ll need to purchase extra homes to continue to use their accounts. For now, the additional homes cost $1.17 in Argentina and  $2.99 everywhere else. On a Basic plan, users can add only one extra home. On a Standard plan, Netflix will allow two extra homes. And on Premium, users can add three additional homes.

It’s also important to note that one can only get a two-week travel dispensation once per year at any given location.

Netflix’s support page explains more about these measures to end password sharing:

Add an Extra Home

Beginning August 22, 2022, when you sign in to Netflix on a TV outside of your home, you will see the option to add the extra home for an additional fee per month.

If you will only be using this TV for a limited time, you can watch Netflix for up to 2 weeks at no extra charge as long your account has not been previously used in that location. After that time, the TV will be blocked unless you add the extra home.

Netflix also explains how it determines the “home” of a user.

How Netflix Detects Homes

We use information such as IP addresses, device IDs, and account activity.

If you are using a device within your included home and still see a message that says that too many homes are using your account, you can:

Make sure that the device is connected to the same internet connection as the other devices in the home.

Make sure that the device is not connected to a VPN, proxy, or any unblocker service.

Netflix is not messing around when it comes to password and account sharing.

Netflix

100 Million Households Are Netflix Password Sharing

This is quite a move from a company that reportedly spent $400 million for the Knives Out sequels. And is dropping something like 86 original movies this year. But according to a company blog post, Netflix claims the password sharing is preventing them from investing in top-tier content.

Chengyi Long, director of product innovation at Netflix, said, “We’ve always made it easy for people who live together to share their Netflix account, with features like separate profiles and multiple streams in our Standard and Premium plans. While these have been hugely popular, they have also created some confusion about when and how Netflix can be shared. As a result, accounts are being shared between households—impacting our ability to invest in great new TV and films for our members.”

Furthermore, the Netflix shareholder letter, indicated more than 100 million households are sharing passwords. More specifically, 30 million households in the US and Canada share passwords. This is a problem for the streaming platform. And subscribers down, this might just be what they need to boost the numbers.

Netflix

How Will Consumers Respond to These Netflix Attempts to Stop Password Sharing?

So this is all to say password sharing on Netflix is responsible for The Baby-Sitters Club‘s premature demise. We can’t imagine that’s specifically true. The announcement comes at a pretty overwhelming moment for streaming platforms in general. Pretty much every major studio with a distribution wing has one. Disney— which just snatched its Defenders Saga back from Netflix has three. That company has made serious moves with Disney+ over the next several months. Disney+ has added parental controls and ad-supported pricing in a relatively short space of time. And then there’s Paramount with its two wings. And haven’t even mentioned Prime Video, HBO Max, Apple TV+, and so, so many more.

It’s reaching a point where subscribers are already shelling out a lot monthly to keep up. Password sharing, and trading off, has historically made things a little bit easier. Netflix notes it knows this move might not be initially popular. The company shares, “From our experience in Latin America, we expect some cancel reaction in each market when we roll out paid sharing, which impacts near-term member growth. But as borrower households begin to activate their own standalone accounts and extra member accounts are added, we expect to see improved overall revenue, which is our goal with all plan and pricing changes”

Who knows, maybe password-sharing crackdowns on Netflix and other streamers will finally force subscribers to think about how much they actually need a particular platform. Or maybe it will do exactly what the company hopes.

Originally published on March 16, 2022.

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