(NEXSTAR) – Whether you’re sharing a Netflix password with someone or borrowing theirs, be prepared to start paying for it. The streaming giant has warned that a crackdown on password sharing is imminent, and it looks like they’re almost ready to roll out new rules.
In a letter to shareholders last week, Netflix said it plans to roll out paid account sharing “more widely” towards the end of the first quarter of 2023. Netflix estimates that more than 100 million households share accounts, which “undermines our long-term capability.” to invest and improve Netflix.
The executives explained in the letter that they expect some users to cancel their accounts when paid sharing launches, but “borrowing households” will open their own accounts.
How paid password sharing will be applied and how much it will cost have yet to be released.
The features tested by Netflix in Latin America last March cost around $3 or $4. During last week’s earnings call, COO and Chief Product Officer Greg Peters said the company was trying to find “the right prices”.
Netflix was already exploring ways to crack down on password sharing in 2021 when it tested a login verification process. If a user the company suspected was not the account owner tried to log in, Netflix would email or text the account owner a code. This code had to be entered within a certain period of time, otherwise the user could not access the service.
In March 2022, Netflix began testing two new features – one that allowed members to add a sub-account for people living outside their household for a nominal fee, and the second that allowed users who share an account to transfer their profile information to a new account or sub-account – in Chile, Costa Rica and Peru.
In these countries, Netflix warns that devices connecting to your account from outside your household may be blocked. Netflix can detect devices outside of your home using information such as “IP addresses, device identifiers, and account activity from devices connected to the Netflix account”.
A month later, executives again hinted at a crackdown after blaming password sharing, as well as increased competition from other streaming services, for its first loss of subscribers in more than a decade. .
In July, Netflix tested a separate feature in another set of countries that allowed users to purchase additional “homes” to use a TV or TV-connected device outside of their household, reports The Verge. Users could purchase the additional “home” to allow users to access Netflix outside their homes. Any TVs that weren’t connected to the additional home were blocked after two weeks, Netflix said.
Then, in November, Netflix launched a new feature that lets you see which devices have been streaming from your account and disconnect those you don’t want access to “with just one click”. Although Netflix has suggested using the feature to sign out of a hotel TV or a friend’s device on a vacation trip, you can also delete any device using of your ID.
Netflix’s move to crack down on password sharing is a shift from the company’s previous take on the common practice. Then-CEO Reed Hastings (he resigned as CEO last week) said in 2016 that Netflix would not charge users for sharing their passwords. Instead, he called password sharing “something you have to learn to live with,” CNBC reports.
Hastings had also never been a fan of the ads, calling them a distraction from the entertainment provided by the service. But, in November, Netflix launched a fourth plan, “Basic with Ads”, which includes an “average of 4-5 minutes of ads per hour”. Users of this plan also do not have access to the full Netflix library.