It looks like Netflix’s password-sharing days are numbered, as the streaming giant has apparently had enough of people sharing their accounts with friends and family who don’t live in their household. Netflix said it will soon introduce a new system that will block certain types of password sharing to protect its bottom line. So when will this change happen, and what can you do if you’re one of the 100 million affected users?
Netflix Password Exchange. why the pressure?
Netflix has always disliked password sharing from a revenue perspective. they are better off having each user pay for their individual account. By: Wall Street Journal (opens in new tab) ( WSJ ), Netflix identified password swapping as a major revenue drag back in 2019, but company management was concerned about potential user reactions to any changes.
The issue of the password exchange remained until early 2022, when Netflix suddenly faced stronger streaming competition (like from Disney Plus). (opens in new tab) and Amazon’s Prime Video (opens in new tab)), huge costs of content creation and, in real terms, a reduction of almost a million subscribers (opens in new tab) post-epidemic.
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So along with innovations like the introduction of a new subscription plan with ads (opens in new tab), Netflix felt it had no choice but to bring back much-needed revenue by cracking down on the password in all global markets. Starting in March 2022, the company has begun several trials of its new “Paid Sharing” in several markets outside the United States, it said. CBS News (opens in new tab). Reports from these countries suggest a slowly growing effort to prevent password sharing, relying on technology and user good faith to force chronic password sharers to pay for the service.
On January 19, 2023 letter to shareholders (opens in new tab)Netflix supported its Paid Sharing release by explaining that “today’s widespread sharing (100 million households) undermines our long-term ability to invest in and improve Netflix and build our business.”
WSJ (opens in new tab) reported that there are about 30 million Passcode users in the US and Canada, generating $721 million in additional revenue for Netflix from those markets alone under the new paid exchange regime.
When will the password take place?
In its January 2023 letter to shareholders (opens in new tab)Netflix explained that Paid Sharing will roll out to the rest of its global markets “later in Q1,” meaning these password sharing changes should begin rolling out for affected US users by the end of March 2023.
What can Netflix users expect?
Netflix FAQ (opens in new tab) states that the company will use “IP addresses, device IDs, and account activity from devices signed into a Netflix account” to determine which devices are in the same family. It also says that “People who don’t live in your household should use their own account to watch Netflix,” but that “Netflix doesn’t automatically charges you if you share your account with someone who doesn’t live with you.”
So if you are the owner of the account providing your password, you will not receive an account or your programming will be disrupted. But if you’re the one with the free account, Netflix will first use various technical signs to determine if you actually live at home. If the platform determines that you do not live there, you will likely be blocked from accessing the shared account at the end of March. That is until you or the account owner pays a small fee to continue sharing.
Also be prepared for confusion and technical glitches. A global technology site The rest of the world (opens in new tab) reports that Netflix’s 2022 paid exchange test in Peru was a big mess. Many Peruvian users were able to avoid the extra charges, while others were asked to pay more and responded by canceling their accounts.
What can affected Netflix users do?
The 100 million password-borrowed users worldwide (and 30 million in North America) who suddenly find themselves locked out of their favorite Netflix shows have a few options:
- Pay the new fee. The simplest option is to pay the upcoming paid sharing fee, which can be $3 per month, according to WSJ (opens in new tab).
- Skip the hassle and finally get your own Netflix account. The company offers a “Basic Ads” plan (opens in new tab) for only $6.99 per month.
- Switch to a competing streaming service that isn’t looking over your shoulder… Yet. Disney Plus offers reasonable monthly packages and still doesn’t prevent password sharing. Same with Amazon Prime Video:which is probably the best streaming deal on the market for free with Amazon Prime.
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