Netflix to crack down on password sharing, roll out fees by April

Netflix plans to crackdown on password sharing in the coming months, with a roll-out of additional fees for sharing a single subscription across multiple locations

Netflix’s planned crackdown on password sharing could come into force in the coming months, as the streaming giant aims to roll out fees in the first quarter of 2023.

According to news reports, the streaming giant will start getting tough on password sharing with people outside of the subscriber’s household.

The practice of sharing passwords will become more complex and is likely to involve an additional fee to share a single subscription across multiple locations.

The company has not yet specified when the crackdown will begin, but it is expected to take place between now and April.

“As we roll out paid sharing, members in many countries will also have the option to pay extra if they want to share Netflix with people they don't live with. As is the case today, all members will be able to watch while traveling, whether on a TV or mobile device," Netflix said in a report to shareholders.

The company conducted a trial of the new stricter rules in selected Central and South American countries last year and admitted that it expected a negative reaction in the short term.

"As we work through this transition – and as some borrowers stop watching either because they don't convert to extra members or full-paying accounts – near-term engagement, as measured by third parties, like Nielsen's The Gauge, could be negatively impacted.”

"However, we believe the pattern will be similar to what we've seen in Latin America, with engagement growing over time as we continue to deliver a great slate of programming and borrowers sign-up for their own accounts."

It is important to note that the new system will not restrict mobile devices such as smartphones, tablets, or laptops to enable legitimate users to still access their accounts while traveling.

However, the new system may prevent you from logging into your account from a friend’s or relative’s house or from sharing a single subscription across multiple houses.

In a blog post from Chengyi Long, Netflix’s director of product innovation, the new system would allow for only one home to be connected to a single Netflix account.

The account can be used across multiple devices, but to add additional households, a monthly fee will apply. In most Latin American countries it was $US 2.99.

While traveling, the account will only be accessible by tablet, laptop, or mobile. Subscribers will be able to log on to remove unwanted households from their account.

In an interview with Variety, Netflix co-CEO Greg Peters conceded that the crackdown on shared passwords would "not be a universally popular move" and the company would begin enforcing the new regime by giving customers who continue to share accounts "a gentle nudge" to pay extra for multi-household use.

In the report to shareholders, Netflix reported a total of 231 million paid memberships in 2022, $US32bn generated in revenue, and $US5.6bn generated in operating income.

However, in 2022 Netflix lost 200,000 customers in the first quarter alone and said it expected to lose two million more in the second quarter.

The company blamed the drop on a number of factors including increased competition and the war in Ukraine.