Netflix password sharing: What are the new rules?

The streaming service has launched a 'paid sharing' scheme

The Netflix logo
Netflix is cracking down on password sharing. (Netflix)

Netflix has begun its crackdown on users sharing their passwords in the UK.

The streaming giant will force subscribers to pay an extra fee to share their accounts with people outside of their household.

The controversial move will affect millions of people across the country. Here's everything you need to know about the new rules.

What are Netflix's new password sharing rules?

After being teased for a number of weeks, Netflix's crackdown on password sharing officially began on Tuesday, 23 May, with the streamer sending emails to customers in the UK informing them of important changes to their terms of service.

These emails explain to customers that they can share their Netflix account with a third party that lives outside of their own home for an additional £4.99 per month.

This new 'paid sharing' scheme was first launched in several Latin American countries last year, before being introduced in Canada, New Zealand, Portugal and Spain in February.

In July it was confirmed that the streamer's password sharing crackdown had led to a 5.9m increase in subscriptions in Europe.

Read more: New on Netflix UK in May 2023

Netflix has an estimated 15 million subscribers in the UK, making it the country's most popular paid streaming service. Password sharing among households is widespread, with around four million users letting friends and family use their accounts for free, according to recent reports.

Netflix CEO Reed Hastings previously said he was comfortable with users sharing their passwords. "Password sharing is something you have to learn to live with," he said in 2016, "because there's so much legitimate password sharing, like you sharing with your spouse, with your kids. So there's no bright line, and we're doing fine as is."

Stranger Things season 4 cast
The cast of Netflix's sci-fi series Stranger Things. (Netflix)

The u-turn comes after the company lost an estimated 500,000 UK subscribers last year, despite launching the latest seasons of hit shows such as The Crown, Bridgerton and Stranger Things.

The cost-of-living crisis has forced many households to cut back on spending, while Netflix is also battling competition from rivals such as Prime Video, Apple TV+, Disney+ and NOW.

Last February, the company hiked the price of its basic and standard plans by £1 a month to £6.99 and £10.99 respectively, while the premium tier went up by £2 to £15.99. In November, it introduced a cheaper ad-supported tier, costing £4.99 a month.

But in July 2022 it was revealed that Netflix has decided to remove its cheapest ad-free plan, £6.99 a month, as an option for new subscribers. This decision was made to try and draw subscribers to the either the ad-supported plans or the premium tier.

Matt Ross, the managing editor of research firm Digital i, warned that Netflix may face "a bit of kneejerk reaction" to paid sharing.

Dominic West and Elizabeth Debicki in The Crown season 5
Dominic West and Elizabeth Debicki in The Crown season 5. (Netflix) (Keith Bernstein)

"We have seen a drop in viewing per account in Spain where Netflix has already started to crackdown on password sharing," he told The Guardian. "The question is what the overall impact will be on subscriber numbers in the long term."

But Richard Broughton, an analyst at Ampere, said there "hasn't been a huge amount of consternation" in countries where the scheme has been rolled out.

He added: "Netflix has had plenty of time to test this. It is not too uneconomical to upgrade to add more people. We don't see large numbers of people furious about not being able to access Netflix for free."

Watch: Netflix enjoys subscriber boost