The latest developments in Netflix's clamp down on password sharing

Abby Robinson
·3-min read
Photo credit: Netflix
Photo credit: Netflix

Many of us with Netflix accounts have long adopted the principle that sharing is caring, doling out our passwords among family and friends because we're nice like that.

But the streaming giant certainly doesn't view it that way.

If your parents, for example, also make use of your account, that's one less subscription fee on Netflix's books. They're enjoying all the platform has to offer for free, which definitely wasn't part of the company's grand master plan when it was plotting world domination.

Photo credit: Netflix
Photo credit: Netflix

In 2019, Vox reported that 14% of US Netflix users were using the accounts of family and friends outside their households, according to analysts MoffettNathanson. The data also revealed that "Netflix non-payers" equated to around 8 million users.

Last year, a poll highlighted by The Simple Dollar placed that number at 12%, which could be costing the company more than $500 million. Considering that Netflix has said it will fork out over $17 billion on content in 2021 (via Variety), a hefty increase from 2020's $11.8 billion, you can see why this could be a source of concern, with the bigwigs wanting to hoover up funds wherever possible.

Photo credit: Nick Wall/NETFLIX © 2020
Photo credit: Nick Wall/NETFLIX © 2020

Password sharing violates Netflix's terms of service, which means it's technically illegal: "The Netflix service and any content viewed through the service are for your personal and non-commercial use only and may not be shared with individuals beyond your household.

"During your Netflix membership we grant you a limited, non-exclusive, non-transferable right to access the Netflix service and view Netflix content."

Clearly, the public isn't rattled because it's continuing to happen, with Netflix executives repeatedly asked to comment on how they aim to tackle it. And last month, it looked like that was finally starting to happen.

Photo credit: Beth Dubber - Netflix
Photo credit: Beth Dubber - Netflix

Streamable recently noted that a number of subscribers had received the following "prompt": "If you don't live with the owner of this account, you need your own account to keep watching."

To continue their show or movie, they'd need to verify the account via an email or text code. If they weren't able to, they'd have to create a new account.

Speaking to the publication, a Netflix spokesperson said: "This test is designed to help ensure that people using Netflix accounts are authorised to do so."

Digital Spy also reached out to Netflix for comment.

Photo credit: Netflix
Photo credit: Netflix

As far as we're aware, it's currently just an experiment, and Netflix is no stranger to trialing various different features, many of which never progress beyond that stage.

But how serious is it this time?

During a recent earnings call, at which Netflix execs were present, one financial analyst put the question about account sharing to them (via PCMag).

"We will test many things," said Netflix co-CEO Reed Hastings, addressing the assessment. "But we would never roll something out that feels like turning the screws.

"It's got to feel like it makes sense to consumers, that they understand. And Greg [Peters, Netflix's chief product officer] has been doing a lot of great research on...how to try variants that harmonise with the way consumers think about it."

What does that all mean? Netflix doesn't want to introduce any changes that will alienate its subscriber base, although the spate of fan favourite cancellations certainly doesn't align with that.

Photo credit: Netflix
Photo credit: Netflix

But Hastings' answer wasn't confirmation that Netflix will never commit to stamping out password sharing. If it's truly worth its while, the company will undoubtedly act.

It evidently hasn't been a pressing matter during its current lifespan, but that could all change with time, especially as their subscriber growth has slowed down in 2021, following the boom fuelled by lockdowns in 2020.

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