Netflix will crackdown on password sharing in 2023. Netflix identified password sharing as a major revenue loss in 2019, but the company put the issue on the back-burner out of fear of user backlash, according to The Wall Street Journal. Password sharing was brought to the surface when Netflix began facing competition from other streaming sites, such as Disney Plus, Amazon Prime Video, and HBO Max, resulting in losing 970,000 subscribers in 2022, according to TechCrunch.
On January 19, 2023, Netflix released a letter to the shareholders stating that “today’s widespread account sharing (100M+ households) undermines our long-term ability to invest in and improve Netflix, as well as build our business,” via Kiplinger. According to The Wall Street Journal, there are about 30 million password sharers in the U.S. and Canada, estimating an extra $721 million in revenue once password sharing is removed under the Paid Sharing regime. Netflix also explained in letter to the shareholders that the Paid Sharing will be put into effect by the end of March 2023, via Kiplinger.
Password sharing will only be permitted with users in the same household, which will be determined through “IP addresses, device IDs, and account activity from devices signed into the Netflix account,” via Netflix FAQ’s. Netflix also made it clear that they will “not automatically charge you if you share your account with someone who doesn’t live with you,” via Netflix FAQ’s.
Netflix introduced these new rules without explanation of what it would mean for users who travel for a living, college students who live away from home, or others who would not be able to verify their address every 30 days, via The Streamable. According to The Streamable, Netflix removed these new rules from their website on Wednesday February 1, creating more confusion regarding Netflix’s future plans.
A Netflix spokesperson said to The Streamable, “For brief time yesterday, a help center article containing information that is only applicable to Chile, Costa Rica, and Peru, went live in other countries. We have since updated it.” The spokesperson has shared with The Streamable that Netflix has been testing anti-password-sharing measures in Latin American countries, which would often be met with customer pushback. The spokesperson has confirmed that if Netflix was to make a significant change, it would first communicate details with customers before rolling it out, according to The Streamable.