Netflix expands efforts to stop password sharing: Here’s what we know

(NEXSTAR) – Yet again, Netflix appears to be giving U.S. users a bit of insight into how it plans to tackle password sharing.

Netflix has made it obvious for months that it’s ready to roll out new rules on password sharing. In a letter to shareholders last month, Netflix said it expects to roll out paid account sharing “more broadly” toward the end of the first quarter of 2023. 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.

The help pages for those three countries were updated last week. At the time, the pages explained account owners would need to set a primary location for their account, anyone watching outside of that location would – in most cases – be blocked from accessing the account, and that extra members could be added to the account for a small fee.

Those pages have since been updated again, largely removing the information that was there last week. Details about setting a primary location are no longer included – instead, the pages explain those living outside the account owner’s home need to get their own account or be added as an extra member.

Wednesday, Netflix rolled out changes for users in Canada, New Zealand, Portugal, and Spain to give members “greater control over who can access their account.”

“We’ve always made it easy for people who live together to share their Netflix account with features like profiles and multiple streams,” the company said in a blog post. “While these have been hugely popular, they’ve also created confusion about when and how you can share Netflix.”

Updates include setting a primary location for the Netflix account (it isn’t clear if users have to reconfirm this location every 31 days like the company initially said last week) 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. 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.

“We value our members and recognize that they have many entertainment choices. A Netflix account is intended for one household and members can choose from a range of plans with different features,” the company said Wednesday. “As always, we’ll refine these new features based on member feedback so that we continue to improve Netflix in the years ahead.”

Netflix didn’t say 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 next few weeks.

“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.”

Netflix’s move to tackle password sharing is a shift from the company’s previous stance. 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.

The Associated Press contributed to this report.