Netflix's Battle Against Password Sharing: Crackdown Initiated

Netflix is taking action against password sharing, starting with its U.S. subscribers and eventually expanding to other global markets. Initially scheduled for the first quarter, the implementation was delayed to the summer due to cancellations observed in markets where the changes were already introduced. 

Under the new rules, U.S. subscribers will have to remove individuals from their Netflix account or pay an additional $7.99 per month for members outside their primary household.

These adjustments will be gradually rolled out in various global markets in the coming weeks and months. To ease the transition, Netflix offers tools for current subscribers to identify logged-in devices and remove unauthorized access. Subscribers can also reset their passwords if needed.

For individuals sharing someone else’s Netflix account, there’s a “Transfer Profile” option to help them transition to their own account. This feature allows the relocation of account information, including viewing history and watchlist.

Despite facing significant consumer backlash, Netflix reassures investors that the password crackdown will have a positive impact on long-term business growth and financial well-being.

Netflix co-CEO Greg Peters draws a parallel between subscriber reactions to price increases and the response to the password crackdown in supported markets. He mentions the initial wave of cancellations followed by subsequent growth as individuals signed up for their own Netflix accounts or purchased additional memberships for sharing purposes. Peters highlights the consistency of results across different countries, each with distinct market characteristics.

Netflix initially tested the password-sharing feature in Latin American markets and later expanded to Canada, New Zealand, Portugal, and Spain earlier this year. 

With the recent launch, the company is reaching a broader range of global markets, including Brazil, Bolivia, Belize, France, Germany, Iceland, Ireland, Italy, the Philippines, Malaysia, Israel, Thailand, Taiwan, Switzerland, Sweden, and others.

The delay in implementing the crackdown during the first quarter may have been influenced by Netflix’s desire to avoid further impacting its net subscriber additions. In the previous quarter, the company reported a net increase of 1.75 million global subscribers, falling short of Wall Street’s estimate of 3 million, resulting in a total of 232.5 million accounts worldwide.

Netflix announced on its blog that it would be sending an email to U.S. members who are sharing their account. The email emphasizes that a Netflix account should only be used by one household while highlighting the convenience of accessing Netflix from different locations and utilizing features like Transfer Profile and Manage Access and Devices. It provides information on available options and directs members to additional help documentation if required.