Netflix’s much-anticipated crackdown on password sharing has commenced, with the implementation scheduled for the first quarter of this year, the launch of the “paid sharing” policy was delayed until the summer due to a wave of cancellations in markets where the changes had already been introduced. Under the new rules, U.S. subscribers will now be required to either remove unauthorized users from their Netflix accounts or opt for an additional membership priced at $7.99 per month for individuals outside their main household.
In the coming weeks and months, similar changes will be introduced to numerous global markets as Netflix aims to enforce stricter regulations on password sharing. To facilitate this transition, the streaming giant has provided tools to ease the process for current subscribers. These tools include a feature that allows users to view which devices are currently logged into their account and remove any unauthorized access. Additionally, users have the option to reset their passwords for enhanced security.
For individuals currently sharing someone else’s Netflix account, the platform offers a “Transfer Profile” option. This feature assists users in transitioning to their own personal accounts while enabling them to retain their existing account information, including their viewing history and watchlist.
Despite facing significant backlash from consumers, Netflix remains confident that the password crackdown will ultimately benefit its long-term growth and financial well-being. During its first-quarter earnings report, Netflix co-CEO Greg Peters drew parallels between the initial reaction to the crackdown and the response to previous price increases. He highlighted that although there may be an initial wave of cancellations, the company expects to see a rebound in both membership and revenue as borrowers sign up for their own Netflix accounts and existing members opt for the additional membership option to share with others.
Netflix initially tested the password-sharing feature in Latin American markets before expanding it to countries such as Canada, New Zealand, Portugal, and Spain earlier this year. With the current rollout, Netflix aims to reach a wider range of global markets, including Brazil, Bolivia, Belize, France, Germany, Iceland, Ireland, Italy, the Philippines, Malaysia, Israel, Thailand, Taiwan, Switzerland, Sweden, and many more.
The decision to delay the crackdown in the first quarter was likely driven by Netflix’s desire to avoid further impact on its net subscriber additions. In the previous quarter, the company fell short of Wall Street’s estimates, reporting a net increase of 1.75 million global subscribers, bringing its total to 232.5 million accounts worldwide.
Netflix recently announced on its official blog that it will be sending out an email to U.S. members who are sharing their accounts. The company emphasizes that a Netflix account is intended for use by a single household, allowing all residents to enjoy the streaming service at home, on the go, or during vacations. The email provides members with information on the available options and directs them to additional help documentation if needed.
While earlier tests indicated that Netflix could recover from the impact of the password crackdown, the company has yet to witness the full results in its largest and most significant market, the United States. This is particularly significant as Netflix faces intensified competition for users’ time and money, with the launch of HBO Max’s transformation into Max, combining HBO and Discovery+ content, as well as Paramount+ adding Showtime to its service next month. Additionally, Disney plans to merge Disney+ and Hulu into a single app. While these changes may come with price increases, they also promise an expanded range of content for subscribers. In contrast, Netflix is asking viewers to pay more for the same offerings, heightening the importance of the ongoing password-sharing crackdown for the company’s future success.