Early trials hint at how Netflix plans to stamp out password sharing

February 2, 2023, 4:31 PM UTC
A man is seen scrolling through Netflix on an iPad.
Netflix is planning to put an end to password sharing.
Phil Barker/Future Publishing via Getty Images

Time is running out for anyone using someone else’s Netflix account to binge-watch hit shows like Stranger Things and The Crown as the streaming giant has promised to put an end to password sharing within weeks.

The company has now updated its help page for U.S. users with details about what to expect when it crackdowns on account sharing, and a new trial in Latin America is shedding light on how Netflix is planning to enforce the rules.

One of the main techniques Netflix will use—according to the new FAQs on password sharing for American users—is device verification.

When a device tries to log into an account outside of the associated household, or if an account is frequently being used outside of the home, the primary account holder will be emailed a four-digit code to authenticate the login attempt.

Netflix said that the primary account holder, and those living with them, should not be asked for verification if they travel outside of their home, but if they are away from the household for an extended period, they may occasionally be required to enter a verification code.

“People who do not live in your household will need to use their own account to watch Netflix,” the company reiterated on the new help page.

How will Netflix know if you’re password sharing?

Netflix’s help pages for Peru, Costa Rica and Chile—where it has been trialing its new rules on password sharing—have also been updated, sharing a little more detail on the process.

The company will use information like IP addresses, device IDs, and account activity to monitor whether people who don’t live with the primary account holder are using their login credentials. It promises not to collect location data via devices’ GPS systems.

Users in trial countries have been instructed to set up a primary location, which is described as “the main place where you watch Netflix” and “associated with your home Wi-Fi network and the devices connected to it.”

Netflix’s apps in these locations have been updated with additional settings that allow users to set their primary location, which involves verification via text or email.

“To ensure that your devices are associated with your primary location, connect to the Wi-Fi at your primary location, open the Netflix app or website, and watch something at least once every 31 days,” Netflix’s instructions say.

Those in Peru, Costa Rica, and Chile who still want to help others out with access to Netflix, now have the option to add extra members to their account instead of just sharing their login details.

This offer allows account owners to buy an extra member slot for their account for less than the price of a basic Netflix plan, which they can use to invite people outside of their households to use the platform.

Extra members have their own accounts and passwords, but their membership is paid for by the person who invited them to join. They will only be able to watch Netflix on one device at a time.

Despite the new anti-password-sharing system being in place in the three Latin American trial countries, some users taking part told tech publication Rest of the World that there had been no consequences when they ignored the rules.

How damaging is password sharing for Netflix?

With the streaming wars heating up in recent years thanks to major players like Disney and Apple entering the arena, Netflix’s subscriber numbers have come under pressure.

In a letter to shareholders last month, the company said password sharing “undermines our long-term ability to invest in and improve Netflix,” and vowed to put an end to the practice within 10 weeks.

Alongside its clampdown on password sharing, the company announced last year that it would be introducing a $7-a-month ad-supported subscription plan, betting the budget offering would help it jump-start growth.

It wasn’t wrong—at the end of January, Netflix published its first quarterly earnings report that reflected subscription numbers from its commercial-supported tier, with the figures massively outperforming Wall Street’s expectations.

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