Netflix: The end of account and password sharing

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For several years, Netflix has been a thorn in the side that many users pass on the passwords of their accounts to friends and family members who do not live in the same household, thus engaging in “account sharing.” A charge is paid for but used by different people. In 2019, Netflix was already planning to crack down on this, but then came the Corona pandemic and, with it, a whole bunch of new subscribers-

100 million secondary users
But now that many users have cancelled their accounts again because they are less at home than during the pandemic, Netflix wants to crack down on password sharing. 2023 could be the year Netflix puts an end to this practice – or gets paid extra for it. That’s according to the Wall Street Journal.

According to the report, around 100 million people use video streaming services with borrowed passwords and without paying. It says that the U.S. plans to crack down on password sharing as early as 2023. Other countries – including Europe – are expected to follow. After all, user numbers are not only in a sharp decline in the U.S. but also in Europe.

Account sharing only allowed in own household
That the whole thing is tricky for Netflix is clear to the CEO. Ted Sarandos told investors in December: “We can’t make a mistake. I don’t think consumers* will love it right away.” Incidentally, Netflix’s T&Cs have stated for some time that the person may only use an account to control the device being used to stream. The “Help” pages say that reports may only be shared with people who live in the same house or apartment (such as kids, parents, or partners).

Detecting multiple uses through technical queries
But how does Netflix want to control this in the future? One way is to monitor IP addresses, device IDs and account activity. If a streaming subscription is regularly accessed from two different locations and devices, this could indicate account sharing outside the user’s home. However, streaming outside of one’s home, such as when one is travelling, is officially allowed, and that would pose problems for Netflix.

But even if Netflix can detect that an account is used multiple times via technical queries, what will it do about it as a consequence? One possibility would be to charge extra money for the double use of the account. Another option would be to make password sharing technically more difficult so that it simply becomes unattractive.

The pilot test in South America with codes
There is a pilot test in South America. They are testing what happens when warnings are issued. Account owners are also sent a code to enter whenever someone logs in from their account and wants to stream. If the code is not entered within 15 minutes, that person cannot stream. Netflix is betting that users will find this too tedious in the long run.

Netflix assumes it will pay off in the long run to take action against password sharing – even if the online streaming service loses some users because streaming is no longer profitable for them.