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According to a new report from the Wall Street Journal, popular streaming service Netflix plans to ban password sharing starting in early 2023. Rumors of the end of account sharing are persistent, and Netflix has already been looking at methods to combat this, with the changes set to officially take effect next year.
Netflix has long known that account sharing is a problem that hurts profits, but the surge in subscriptions in 2020 has allowed the company to ignore the problem. With revenues declining this year and Netflix suffering a subscriber loss for the first time in 10 years, Netflix CEO Reed Hastings decided it was time to address the problem that had been put off for too long.
Netflix to crack down on password sharing in early 2023
Starting in 2023, Netflix plans to charge a fee to people who share accounts with others outside their household. In some Latin American countries, Netflix has already tested charging an additional fee of around $3 for account sharing. In those countries, the primary account holder must provide a verification code to anyone outside the household who wants to access the account. Netflix will then keep asking for the code until a monthly fee is paid to add non-household subscribers. A similar tactic could be used in other markets, with Netflix charging non-household subscribers who share someone else's account a fee just below the cost of the smallest plan of €7.99. Netflix wants those who have a shared account to take out their own subscription.
The terms of use are clear
Netflix will enforce its password-sharing rules based on IP addresses, device IDs, and account activity. To avoid alienating customers, the company may phase out account sharing slowly rather than banning it all at once. One method Netflix reportedly considered was adding pay-per-view content that could prevent users from sharing their passwords with people who might rent content, but Netflix ultimately decided against it. Netflix's terms of service have never allowed password sharing across households. But the streaming service has looked the other way for so long that introducing fees for sharing passwords with friends and family could anger some of its subscribers. An estimated 222 million paying households share passwords with another 100 million households that Netflix hopes to monetize.
Netflix: One household per account
Netflix's plan prices include watching on multiple supported devices and compromise streaming quality. However, Netflix doesn't want multiple people outside the same household watching. Netflix's Premium plan, for example, allows Ultra HD 4K streaming and simultaneous watching on four supported devices such as iPhones, iPads and Macs, as long as those devices are used by people in the same household. In addition to increasing its revenue by eliminating account sharing, Netflix has also introduced a cheaper ad-supported plan that costs $6.99 per month in the US. (Photo by Unsplash / Thibault Penin)
