How Is Netflix Cracking Down on Password Sharing?

The fight against password sharing has begun at Netflix. However, it is still too early to say whether the company’s strategy will be successful.

Netflix doesn’t mind if you share your password with folks you live with.

Given its latest profits report, it appears that Netflix will have to tighten its grip on password sharing. The corporation has already implemented a strategy, but only in a few countries. So, how is Netflix combating password sharing? Let us investigate.

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One of Netflix’s most serious issues is password sharing.

Netflix is addressing the issue of password sharing following weak revenue growth in Q1 2022, which was caused in part by account sharing. Netflix claims that its service is used by more than 100 million homes, according to a shareholder letter.

However, account sharing isn’t the only issue facing the organisation. Although having 222 million active users, Netflix lost 200,000 subscribers during the first three months of 2022, despite expecting to add roughly 2.5 million new consumers, negatively impacting its bottom line.

Members of Netflix’s Standard and Premium subscriptions have long been allowed to share their accounts with the individuals they live with, according to Netflix, which has led to uncertainty regarding when and how you may share your account.

According to a Netflix blog post, this makes it difficult for the firm to invest in fresh programming. As a result, in order to avoid more losses and maybe inspire more individuals to join up for the service, the business is tightening down on account sharing.

How Netflix Is Tackling Password Sharing

Netflix intends to commercialise password sharing in order to minimise the number of freeloaders on their service and increase membership numbers.

So, in March 2022, Netflix began testing two new sharing options that would allow customers to share their accounts with anyone outside their homes for a fee. For the time being, it’s too early to be concerned about Netflix charging to exchange credentials globally. In the coming weeks, these two features will be available exclusively in Chile, Costa Rica, and Peru.

The first feature is the ability to add an additional member. Members of the Standard and Premium plans will be able to create up to two sub-accounts for those who reside outside their houses.

Each account has its own profile, tailored suggestions, and login information. Members in Chile will pay 2,380 CLP, $2.99 in Costa Rica, and 7.9 PEN in Peru for this function.

The second option is to Transfer your Profile to a New Account. Members of Netflix’s Basic, Standard, and Premium subscriptions will be able to authorise someone else to move their profile information to a new account or an additional member sub-account.

This allows the migrating account to retain its account material, such as viewing history, My List items, and tailored suggestions.

Will Netflix’s plan to prevent people from sharing passwords succeed?

Netflix’s strategy to monetise password sharing may be partially successful, but not fully because users will still be able to share their credentials with people in other households. This is due to the fact that Netflix is not requiring subscribers to purchase the extra services, and it will not penalise them for continuing to share their accounts.

Similarly, as of yet, Netflix has made no mention of introducing restrictions to users’ accounts in order to prevent account sharing.

Netflix, on the other hand, must exercise caution. As previously said, the platform is losing customers, and its fees are rising in the United States and Canada, which is one of the reasons individuals share their accounts. To entice users to enrol or renew their subscriptions, Netflix may need to offer an ad-supported plan or another discount.

Netflix has a long road ahead of them

People swap accounts because not everyone believes Netflix’s premium subscription is worthwhile. As a result, Netflix has its work cut out for it and will not see meaningful improvements unless it imposes stricter membership limitations. As a result, if the service wishes to address the issue of account sharing more successfully, it must reconsider its strategy.