Netflix plans to startin the United States who shared their password for the streaming service at the end of March. But how exactly would that work?
Initial reports and trials in other countries suggest that the effort to deter password sharing will be relatively mild in its first iteration, relying on a combination of technology and user awareness to incentivize serial over-sharers to pay more for the privilege.
Netflix will likely use a person’s geographic location, as determined by the IP address of any internet-connected device, to determine which people count as “household” members who live together, Insider reporter Sarah said. Saril at CBS News.
“If you’re watching on a TV, it will tell you exactly where you are,” Saril said. “They only want people in your household, at your address, watching.”
Netflix says on its website that the company uses “the IP addresses, device identifiers, and account activity of devices logged into the Netflix account” to determine which devices are in the same household.
“People who don’t live in your household will need to use their own account to watch Netflix,” the site says.
Netflix announced to investors last week that it would implement stricter sharing rules by the end of March. More than 100 million households currently share Netflix passwords, the service said. This “undermines our long-term ability to invest in and improve Netflix,” the company said in a statement accompanying its latest quarterly results.
In 2022, Netflix restricted password sharing in Latin America, requiring members to pay an additional fee to share their accounts with non-household members. The effort had mixed results.
Tech publication Rest of World called the test a “mess”, reporting that the new policy was rolled out inconsistently. Many users were able to avoid the additional fee, while others were tricked into paying more and reacted by canceling their accounts, the outlet said.
Netflix predicted a similar response in the U.S. “Based on our experience in Latin America, we expect a backlash response in every market when we roll out paid sharing,” the company told investors, noting that this could harm its audience in the short term.
Netflix said it recognized the new policy was a major change for customers, and it sought to cushion the blow by touting new features aimed at making the transition less painful. This includes allowing members to see all devices using an account and making it easier to transfer individual profiles to separate accounts. Last fall, the service also introduced a dashboard that lets account users log out of individual devices.
Netflix hasn’t indicated how much these sub-subscriptions might cost. However, in trials in Chile, Costa Rica and Peru, sub-memberships increased the monthly cost of an account by a quarter or a third, according to Variety.
“That’s where those difficult conversations come in – who’s worth paying an extra quarter of the cost of your subscription each month?” Saril joked.
If Netflix finds that too many locations are using the same account, it will roll out a tech nag: a prompt that asks users to “verify” certain devices via passcodes.
“When a device outside of your household signs into an account or is in persistent use, we may ask you to verify that device before you can use it to watch Netflix,” notes a company FAQ.
However, Netflix also says users won’t be automatically charged if the system detects too many location feeds, and accounts won’t be cancelled. This has led some observers to question the actual effectiveness of password enforcement.
“All signs indicate that the most aggressive Netflix intends to enter the first iteration of the Paid Sharing rollout is to continue inciting violators with reminders and email notifications,” Todd Spangler wrote. in Variety in November.