While logging into Netflix over the weekend to catch up on popular original series or Oscar nominated films, certain users may have received an ominous warning from the streamer. “If you don’t live with the owner of this account,” read the warning distributed to a sample of Netflix subscribers “you need your own account to keep watching” (ABC News). Account holders could proceed to verify their account with a two-step verification, as this system was designed to test whether Netflix can roll-out a “consumer-friendly” method to curb the practice of password-sharing on a larger scale, via Business Insider.
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Many streamers, Netflix included, allow for users to create multiple profiles for one account holder and even offer tiered pricing that increases the number of screens available per subscription. BBC mentions how this element of the user interface may mislead subscribers into believing that password-sharing is normal or even encouraged, all-the-while these streaming services specifically prohibit such practices in their terms and service. The option to create multiple accounts is solely created with a singular household in mind, as opposed to individuals spread across multiple households.
Whether users are aware of this clause in Netflix’s terms of service or not, sharing passwords has become a practice “as endemic to the Netflix experience as having your favorite show canceled two seasons in” (Wired). According to ABC News “approximately one-third of subscribers to services like Netflix share their password with someone outside their household.”
This weekend’s test signals a shift in Netflix’s previous attitude toward the password-sharing phenomena. In 2016, Netflix CEO Reed Hastings was quoted saying “password sharing is something you have to learn to live with” (CBS News). Netflix’s Chief Product Officer, Greg Peters, echoed Hasting’s sentiments in 2019, by saying “we’ve got no big plans to announce at this point in time in terms of doing something differently there” (ABC News).
However, according to Bloomberg, a coalition of streaming heads from networks such as Netflix, HBO, Amazon and Disney+ formed in late 2019 to address “ways to limit shared passwords, like text codes and required periodic password changes.” The two-step authentication process rolled out as a test among select Netflix users over the weekend proved one of the first instances in which a streaming service put one of these strategies into action.
The Washington Post cited Netflix’s growing subscriber base as financial incentive to crack down on password sharing, with the streamer exceeding 200 million subscribers. As streaming becomes an increasingly saturated marketplace, whose most recent entry includes CBS All Access’ rebranded streamer Paramount+, competition from other networks may have likewise motivated Netflix’s recent test. However, The Washington Post points out that the risk in rolling out this strategy on a larger scale is that “it might drive others to simply give up on Netflix and turn to one of the other myriad streaming options.”
In reporting on Netflix’s recent roll-out, ABC News was unable to obtain an exact number from Netflix in terms of how many subscribers received this warning on password sharing. “For now, at least,” The Washington Post concludes “the test seems to be limited and no one is in imminent danger of losing their entertainment access.”