Netflix begins cracking down on password sharing in the U.S.: What to know

(NEXSTAR) – The day Netflix has been warning about has finally come to the U.S. – the streaming giant announced Tuesday that it has begun cracking down on password sharing.

If you share a Netflix login with someone outside your home, you may have already received an email regarding “an update on sharing between households.” The message reminds, “Your Netflix account is for you and the people you live with – your household.”

Netflix considers a “household” as a “collection of devices connected to the internet at the main place you watch Netflix.”

The email then encourages you to review devices that are logged into your Netflix account and sign out those that shouldn’t have access.

Then, Netflix offers two alternatives they already launched in multiple other countries: a user living outside your household can transfer their profile to a new membership they pay for, or the account holder can add an extra member for $7.99 a month.

The option to add an extra member is only available on Standard and Premium plans, which currently cost $15.49 and $19.99 a month, respectively, according to Netflix. Standard accounts can add one extra member while Premium accounts can add up to two.

“An extra member will have their own profile, account, and password, but their membership will be paid for by the person who invited them to join,” Netflix explains.

Extra members are not available if you have Netflix through a package or via a third-party billed account, and you can’t opt for a more affordable ad-supported plan.

“We recognize that our members have many entertainment choices. It’s why we continue to invest heavily in a wide variety of new films and TV shows — so whatever your taste, mood or language and whoever you’re watching with, there’s always something satisfying to watch on Netflix,” the company wrote in a Tuesday news release.

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. In early February, Netflix expanded its paid account sharing into Canada, New Zealand, Portugal, and Spain.

Paid password sharing was expected to come to the U.S. by the end of last quarter but co-CEO and director Gregory Peters said during a first-quarter earnings call that “it was better to take a little bit of extra time” for its home market.

Netflix also knows users may leave amid the shift to paid sharing. In a letter to shareholders, executives noted that some in Latin America canceled their accounts amid the password-sharing crackdown but new member registration eventually increased with the use of sub accounts and new users.

“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,” 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.