Netflix has begun pulling back the curtain on plans to ban password sharing. And it’s using methods that can make privacy advocates and frequent travelers uncomfortable.
The streaming service, which used to actively encourage people to share their passwords, now estimates that more than 100 million users are essentially watching for free, which is starting to take a toll on revenue. And by the end of March, it says, the free ride will end.
“Today’s widespread account sharing (100M+ households) undermines our long-term ability to invest in and improve Netflix and build our business,” the company wrote in a recent letter to shareholders. ” “While our terms of use limit the use of Netflix to a household, we recognize this is a change for members who share their account more broadly. So we’ve worked hard to build additional new features that improve the Netflix experience, including the ability for members to review which devices are using their account and to transfer a profile to a new account.”
On Wednesday, the Netflix support center in Peru began explaining how the company plans to monitor account sharing. (Netflix is testing the new policy in the country and will roll it out to other markets in the coming weeks). Another great tool would be location tracking.
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Netflix previews strict anti-password sharing measures until the end of March
“When a device outside of your household is signed into an account or used continuously, we may ask you to verify before that device is used to watch Netflix,” the company wrote. wrote “We do this to verify that the device using the account is authorized to do so. Netflix uses information such as IP address, device ID, and account activity to determine whether to sign in to your account. Whether the device is connected to your account or not. primary location”
Devices outside of Netflix’s primary location, which are connected to your home Wi-Fi network, may be blocked from viewing the streaming service.
This raises questions for people watching Netflix on the road, for example logging into their account on a hotel television.
Netflix said customers can request a temporary code
Netflix said customers can request a temporary code, which will allow them to access the service for seven days if they are traveling or self-lock down. They can also update their primary location if it has changed. And with paid customers, regardless of where they live, they’ll continue to have uninterrupted access as long as they connect to Wi-Fi at their primary location at least once every 31 days.
Of course, it seems that leaves a gap for some membership dodgers. While this may prevent X from logging out of accounts, those who share with friends can log in once a month to keep the gravy train going. While it won’t help if they want to watch on their big-screen TVs, they should be able to continue watching on mobile devices.
Some users might be tempted to skirt the rules by using a VPN, but that’s likely to make things worse, since the VPN will change the device’s IP address to another country, making it appear a nonsubscriber is attempting to access the account.
Subscribers will also have the option to add people outside of their household to their account—for an additional fee. The price on that in the U.S. has not been announced, but Latin American users are being charged an extra $2.99 per month to do so.
According to a Citibank report, password sharing could cost the industry up to $25 billion per year, while Netflix could lose $6 billion per year. To make up for the loss, Netflix raised its subscription fees last year and recently introduced an ad-supported model with lower monthly costs.
