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When will Netflix start charging for password sharing?




(NEXSTAR) — Whether you’re sharing a Netflix password with someone or borrowing theirs, be prepared to start paying for it. The streaming giant has warned that a password-sharing breach was imminent, and it looks like they’re almost ready to roll out some new rules.

In a letter to shareholders last week, Netflix said it expects to roll out paid account sharing “more widely” by the end of the first quarter of 2023. Netflix estimates that more than 100 million households share accounts, which “undermines our long-term ability to invest in and improve Netflix.”

Executives explained in the letter that they expect some users to cancel their accounts when paid sharing launches, but that “borrower households”[ads1]; will start their own accounts.

How the paid password sharing will be enforced, and how much it will cost, has not yet been released.

Features Netflix tested in Latin America last March cost about $3 or $4. During last week’s earnings call, COO and Chief Product Officer Greg Peters said the company is working to find “the right price points.”

Netflix was already looking into ways to crack down on password sharing in 2021 when it tested a login verification process. If a user the company suspected was not the account owner tried to log in, Netflix would send a code via email or text to the account owner. This code had to be entered within a certain time, otherwise the user would not be able to access the service.

In March 2022, Netflix began testing two new features – one that allowed members to add a sub-account for people living outside the household for a small fee, and the other that allowed users who share an account to transfer their profile information to a new account or sub-account – in Chile, Costa Rica and Peru.

In these countries, Netflix warns that devices connecting to your account from outside your household may be blocked. Netflix can detect devices outside of your home using information such as “IP addresses, device IDs, and account activity from devices signed into your Netflix account.”

A month later, executives hinted at a crackdown again after blaming password sharing, as well as increased competition from other streaming services, for the first loss of subscribers in more than a decade.

In July, Netflix tested a separate feature in another round of countries that allowed users to purchase multiple “homes” to use a TV or TV-connected device outside the household, The Verge reports. Users can purchase the additional “home” to allow users to access Netflix outside of their home. All TVs not connected to the additional home were blocked after two weeks, Netflix said.

Then, in November, Netflix launched a new feature that lets you see devices that have streamed from your account and log out the ones you don’t want access to “with just one click.” Although Netflix suggested using the feature to log out of a hotel TV or a friend’s device while traveling on vacation, you can also remove all devices using your login.

Netflix’s move to tackle password sharing is a shift from the company’s previous view of common practice. Then-CEO Reed Hastings (he stepped down as CEO last week) said in 2016 that Netflix would not charge users to share their passwords. Instead, he called password sharing “something you have to learn to live with,” CNBC reports.

Hastings had also never been a fan of ads, calling them a distraction from the entertainment the service provides. But in November, Netflix launched a fourth plan, “Basic with Ads,” which includes an “average of 4 to 5 minutes of ads per hour.” Users on this plan also do not have access to Netflix’s complete library.



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