David Farnor | On 29, May 2023

Netflix has officially rolled out its password sharing crackdown in the UK, with a new fee for anyone sharing their account.

The streamer announced its plans to try and restrict password sharing last year, after it saw a drop in subscribers. The company had previously said it wouldn’t do such a thing but, as it looks to find a way to bolster its position in an increasingly competitive and tough landscape, it has reversed its position in an attempt to maximise its revenue.

This week, it began emailing subscribers in the UK to inform that an additional £4.99 fee would be payable for anyone who is sharing their Netflix outside their household in the United Kingdom. That doesn’t include people within the same household – they can still use Netflix wherever they are, at home, on the go, on holiday – but anyone outside of that. These are monitored by Netflix using IP addresses, device IDs and account activity.

If you regularly log in to Netflix in the same location away from your home, for example, you can link that location and your household – and to maintain that authorised usage, you need to open the Netflix app on the device being used at least once a month at both your main household and the secondary location, so that it is recognised as still being you.

Users won’t be charged automatically for sharing their account with other people, but if you try to use someone else’s account without an extra profile being purchased, a prompt will ask you to set up a new account and transfer your profile across. That means you’ll need to proactively buy the additional profiles for your account, if you’re sharing with other people, for them to be able to keep using the account.

Subscribers can now access a list of devices signed into their account through the settings menu and sign out of other devices. Additional profiles will cost £4.99 a month per user.

“We recognise that our members have many entertainment choices,” says Netflix in a statement.

The decision, however, comes at a time when people are already cutting budgets amid a cost of living crisis, which may mean that users simply choose to cancel their account altogether.

 

Netflix plans password sharing crackdown

20th April 2022

Netflix has said that it’s looking to tackle people sharing the account passwords, as the streaming service responds to a fall in subscriber numbers.

The streaming service saw its overall number of households drop by 200,000 in the first three months of this year, the first time it has seen a quarterly drop in net total customers since October 2011.

While there are a number of headwinds facing Netflix, including competition from rival streamers, the company has been quick to highlight the number of customers sharing passwords with other households as one source of potentially lost revenue and subscriber numbers. In a letter to shareholders, Netflix alluded to cracking down on that practice.

It’s not a new phenomenon by any means. In 2016, a study from Parks Associates found that 11 per cent of all US households relied exclusively on shared accounts when using subscription VOD services. In that same year, Netflix CEO Reed Hastings said there we “no plans on making any changes” over account sharing.

“Password sharing is something you have to learn to live with, because there’s so much legitimate password sharing, like you sharing with your spouse, with your kids,” he commented at the time.

Now, however, he has changed his tune, speaking this week about finding a “more effective monetisation of multi-household sharing”. Indeed, it may not necessarily be a strict crackdown that the streamer has in mind: it has been running a trial Chile, Costa Rica and Peru that allows customers to share accounts with additional households at a discounted rate, which may well be rolled out to additional countries.

The move would be similar to Spotify, Amazon and Apple’s family sharing account plans, although with Netflix having recently increased its prices – one of the factors that has led to a fall in subscriptions – the idea of asking people to add another few pounds on top of their monthly fees to share Netflix with friends may not be very appealing.

Hastings acknowledged in his letter that “sharing likely helped fuel our growth by getting more people using and enjoying Netflix”, but with more than 100 million households estimated to be sharing their Netflix passwords, and with Netflix forecasting a 2 million drop in subscribers in the coming three months, the problem will be high on Netflix’s priority list in the near future.

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