Say goodbye to Netflix freeloading! Password sharing now prohibited in the US


In a move that will leave many Netflix freeloaders in dismay, the streaming giant is taking a stand against password sharing. The company has announced new measures to limit viewership to users living within the same household, effectively booting non-household members from its US-paying customers’ accounts.

(FILES) The Netflix logo at the Netflix Tudum Theater in Los Angeles, California, on September 14, 2022. Netflix on May 23, 2023, expanded its crackdown on users sharing passwords with people beyond their immediate family as it seeks to shore up revenue at the leading streaming television service. “A Netflix account is for use by one household,” the company said in a statement on Tuesday. (AFP)

For customers on standard or premium plans, which range from $15.50 to $20 per month, sharing login credentials with someone outside their household will no longer be allowed. However, Netflix has introduced an option for an additional $8 per month, allowing customers to share their account with someone within the same household, offering a discounted rate compared to the standard stand-alone basic plan.

While Netflix has not disclosed the specifics of how it will authenticate subscriber identities or accounts, the company assures that everyone residing in the same household will still have the ability to stream their favorite TV series and movies, whether at home, on the go, or even while on holiday.

The decision to crack down on password sharing comes after years of lost revenues for Netflix. In 2021, it was estimated that the company was losing $6 billion annually due to password sharing. With over 100 million viewers taking advantage of shared passwords, Netflix saw a significant portion of its revenue potential slipping away. This issue was particularly pressing as the company faced lackluster subscriber growth and experienced its most significant customer losses in more than a decade in 2022, with a decline of 200,000 subscribers in the first quarter.

Netflix had initially planned to roll out the password-sharing ban worldwide by the end of March, but the transition is now expected to be completed in the US by the end of June. The company has already begun blocking freeloaders in several countries, including Canada, New Zealand, Portugal, and Spain. To ease the transition, Netflix has introduced alternative catalogs that can be accessed using genre-specific codes. Additionally, the company is considering offering subscribers the option to create sub-accounts for additional users outside their households for an added fee.

While Netflix’s crackdown on password sharing is aimed at increasing revenue and encouraging viewers to subscribe to their own accounts, the move does carry some risks. Netflix co-CEO Greg Peters acknowledged that this decision might result in subscriber cancellations. However, the company remains determined to address the issue and prevent further erosion of its customer base.

As Netflix continues to adapt to changing market dynamics, including the introduction of a $7 monthly plan with ads, it remains to be seen how viewers will respond to these changes. While the new surcharge for viewers outside subscribers’ households is lower than Netflix’s basic streaming plan, it comes at a time when many Americans are cutting back on discretionary spending due to high inflation.

The stock market has responded cautiously to Netflix’s latest move, with the company’s shares experiencing a two percent decline during Tuesday’s afternoon trading. However, overall, Netflix’s stock price has seen a 20 percent increase this year, suggesting that investors still have confidence in the streaming giant’s ability to navigate the evolving landscape of the entertainment industry.

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