3 things we know about Netflix’s efforts to crack down on password sharing

(NEXSTAR) – It seems to be only a matter of time before Netflix will bring its anti-password sharing efforts to the U.S. after rolling out changes to nearly half a dozen countries – including Canada – earlier this month.

Recently, Netflix has made it clear it’s ready to crack down on a practice once commonly associated with the streaming giant. Last month, Netflix executives told shareholders they expected to roll out paid account sharing “more broadly” toward the end of the first quarter of 2023 – a date that’s nearly here.

The company estimates more than 100 million households share accounts, which “undermines our long-term ability to invest in and improve Netflix.”

Netflix has been exploring ways to crack down on password sharing, including a log-in verification process in 2021 and the use of sub-accounts for people living outside the account owner’s home in 2022, which was tested in Chile, Costa Rica, and Peru.

Roughly two weeks ago, Netflix expanded its paid account sharing into Canada, New Zealand, Portugal, and Spain.

Based on what we’ve already seen, here’s what paid password sharing could look like in the U.S.

How it could work

After a tumultuous rollout in Central America earlier this year, which included making account holders verify their primary location every 31 days, Netflix appears to have pulled back on its password-sharing guidelines.

In a statement announcing the changes in Canada and three other countries, Netflix wrote, “We’ve always made it easy for people who live together to share their Netflix account with features like profiles and multiple streams. While these have been hugely popular, they’ve also created confusion about when and how you can share Netflix.”

Instead, the company explained at the time that changes to sharing included setting a primary location for the Netflix account and introducing sub accounts. Those sub accounts allow account holders with a standard or premium plan to add up to two people who live outside their household to their plan for an extra, smaller fee. Netflix also removed guidance regarding verifying primary account locations from the initial markets it launched paid password sharing in.

It’ll cost you

As previously mentioned, the use of sub accounts comes with a fee.

When it introduced sub-accounts in Chile last year, Netflix charged $2.99 for the extra member. In Canada, Netflix will charge CAD$7.99, which is about $5.95 in U.S. dollars.

It isn’t yet clear how much sub accounts would cost U.S. subscribers.

Currently, sub accounts are only available on standard or premium Netflix accounts, which allow for two and four simultaneous streams, respectively. Those on the standard plan can add one extra member, while premium account owners can add two.

Netflix knows you might leave

When Netflix first rolled out changes earlier this month, many users took to Twitter to express their frustration, especially regarding the original requirement to verify their location once a month. Some even brought back a tweet from 2017 in which Neftlix wrote, “Love is sharing a password.”

Then-CEO Reed Hastings (he stepped down as CEO last month) said in 2016 that Netflix wouldn’t charge users for sharing their passwords. Instead, he called password sharing “something you have to learn to live with,” CNBC reports.

“It’s worth noting that this will not be a universally popular move, so there will be current members that are unhappy with this move. We’ll see a bit of a cancel reaction to that,” Netflix co-CEO Greg Peters said in a conference call with investors in January. “We think of this as similar to what we see when we raise prices.”

Since rolling out changes in Canada and three other countries, Netflix hasn’t said what actions it will take if subscribers continue to share accounts outside their households. While Netflix won’t say when paid sharing will come to other countries, some version of the plan is expected to be introduced in the U.S. in the coming weeks.