It’s been nearly a year since Netflix announced that it would start charging some subscribers a fee for sharing their account with users outside their household. Now, as the streamer prepares for a wider rollout of the policy change, it’s providing more information on how the looming password sharing crackdown will be enforced.
Netflix Password Sharing Crackdown: Netflix stated in its January letter to shareholders that the crackdown will be implemented globally by the end of March. In addition, the company has updated its Help Center with more information about what users can expect in the future.
According to Netflix, over 100 million households worldwide use shared accounts, and cracking down on password sharing would be a “big opportunity” for revenue growth. The planned rollout follows a turbulent year in which the streaming giant lost subscribers for the first time in more than a decade, introduced ads to its service for the first time in its 15-year history, and faced criticism for a number of controversies.
“2022 was a difficult year, with a rocky start but a brighter finish,” Netflix wrote in a letter to shareholders. “We believe we have a clear path to reaccelerate our revenue growth: continuing to improve all aspects of Netflix, launching paid sharing and building our ads offering. As always, our north stars are pleasing our members and increasing profitability over time.”
Here’s everything you need to know about Netflix’s crackdown on password sharing.
How will Netflix’s crackdown on password sharing work?
Netflix subscribers in the United States can currently use their account on one, two, or four screens at the same time, with prices varying according to the number of screens available, ranging from $9.99 to $19.99 per month. This will remain true once the password-sharing crackdown takes effect, with one major exception: all streaming devices logged into an account must be located in the same household.
In the first half of last year, Netflix began experimenting with charging for password sharing in Costa Rica, Chile, and Peru. Netflix has given users in those three countries who are borrowing someone else’s account the ability to transfer their existing profile information—including viewing history and personalized recommendations—to their own account. Subscribers who want to continue sharing with family or friends outside of their household can now pay for “sub-accounts” for additional members.
Subscribers in those countries can add up to two additional members to their accounts for an additional $2.99, 2,380 Chilean pesos, and 7.9 Peruvian sol per month. Netflix has yet to reveal how much it intends to charge for this service in other countries.
“Based on our experience in Latin America, we anticipate some cancel reaction in each market when we launch paid sharing, which will have an impact on near-term member growth,” Netflix wrote in a letter to shareholders. “However, as borrower households activate their own standalone accounts and additional member accounts are added, we anticipate increased overall revenue, which is our goal with all plan and pricing changes.”
How will Netflix prevent you from disclosing your password?
In the future, anyone using an account on a streaming device that isn’t associated with the account owner’s household will be asked to enter a four-digit verification code that will be sent to the primary email address or phone number associated with the account. To gain access, the person using the device must enter the code within 15 minutes. Netflix has stated that it will use IP addresses, device IDs, and account activity from devices signed into an account to determine whether or not a device is associated with a household.
For the time being, the streamer has stated that it will not charge you if you share your account with someone who does not live with you.
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According to Netflix, primary account owners and those who live with them should be able to access their accounts without verification while traveling. However, if you are away from your home for an extended period of time, you may be asked to verify your device on occasion.
To avoid being blocked, The Streamable reported earlier this week that the crackdown would require users to connect to Wi-Fi at their primary location, open the Netflix app or website, and watch something at least once every 31 days on any device associated with their account. That information, which can still be found on an Internet Archive page, has since been removed from Netflix’s U.S. Help Center.
Netflix spokesperson Kumiko Hidaka said in an emailed statement to The Verge that the streamer has not confirmed those details. “As you may recall, we launched Extra Member in Chile, Costa Rica, and Peru in March. However, the United States (and other countries) do not have it,” Hidaka explained. “The only thing we’ve confirmed so far is that in our earnings on January 19, we expect to start rolling out paid sharing more broadly later in Q1.”