TOPLINE 

With Netflix finally setting up a precedent for how it will deal with subscribers who share passwords, the question remains how other streaming services will follow in its steps.

Close-up detail of the Netflix app icon on an Apple iPhone screen.

 In a letter to shareholders, Netflix announced it will begin what it calls a paid sharing cost at the end of March.

The streaming giant has already tested the waters of paid sharing in Latin America—where it has updated its FAQ page for certain countries—to allow users to add an extra member to their plan for a small fee, though it acknowledges that will lead to more cancellations.

To ensure subscribers are using the streaming service within the same household, Netflix will ask users to connect through a home (or consistent) Wi-Fi and watch something on Netflix at least every 31 days to determine the primary location based on IP address and device IDs.

If a user does not set a primary household account, Netflix will automatically set a primary location through IP address and device IDs.

Devices sharing the same primary location Wi-Fi network at least once every 31 days will be labeled trusted devices.

When traveling, subscribers can request one-time codes for access.

So far, Netflix has yet to finalize its policy for U.S.-based users, though it did later clarify that it will broadly implement paid sharing after the first quarter of 2023.

SURPRISING FACT

The rollout of the rules is a stark contrast to the message the service was putting out years ago when it tweeted: “Love is sharing a password.”.

KEY BACKGROUND

Netflix is one of the first major streaming services to begin efforts on password-sharing crackdowns. The streaming giant had previously announced back in early 2022 that it expected to put an end to password sharing amongst its subscribers though for years it had turned a blind eye to the practice. The hope of curtailing password sharing is that it will bring extra revenue to the company after suffering subscriber losses last year. Password sharing was deemed a crime under the Computer Fraud and Abuse Act back in 2016 by the 9th U.S Circuit Court of Appeals in San Francisco, although the circumstances far exceeded simple password sharing amongst family entertainment accounts.

WHAT TO WATCH

Other major streaming platforms have yet to take any new action following Netflix’s announcement to begin an overhaul of password sharing. HBO Max already checks monthly to see how users are using the service and has built in features to ensure subscribers are following the user agreement, allowing flexibility but flagging “rampant abuse” of account sharing. Hulu has remained indifferent to password sharing but places limitations on allowing two screens to be using its service at the same time, and its Live TV feature requires users to set up a home network within 30 days of subscribing to the service, according to its website. Amazon Prime’s approach seems to be the most lax, as subscribers to the service can share their benefits, including Prime Video, with up to two adults, four teens and four children according to its website.

BIG NUMBERS

100 million. That’s how many Netflix households are sharing their passwords, the company reported.