Netflix expanded its crackdown on password sharing in Australia and more than 100 other countries, alerting users that their accounts cannot be shared for free outside of their households.
Password sharing has long been a common practice among Netflix users, allowing individuals to share their login credentials with friends and family, enabling multiple people to access the service under a single account.
While this practice has undoubtedly contributed to the platform’s popularity, it has also posed challenges for the company in terms of revenue generation and content distribution.
The crackdown means that individuals who are not the primary account holder will be unable to access the account when they are away from the account holder’s residence, unless an additional monthly fee of $7.99 is paid.
For those members who prefer not to pay the additional fee, they have the option to preserve their information by transferring the data to a new account.
According to Netflix’s research, over 100 million households have shared their login details with friends and family members residing outside of their own homes.
Previously, Netflix stated that password sharing would be permitted among devices within the same household. To ensure compliance, the company would examine IP addresses, device IDs, and account activity associated with devices logged into the Netflix account.
Netflix explained, “If a device outside of your household attempts to sign in to an account or is consistently used, we may request device verification before granting access to watch Netflix or switch Netflix profiles.”
Reports from local media outlets suggested that Netflix’s decision to charge more for password sharing aimed at generating increased revenue. In the evolving media landscape of 2023, the streaming giant faces intensified competition from other streaming companies.
Producing TV shows incurs significant costs, prompting Netflix to seek ways to maximize its revenue and expenditure while delivering a return on investment to its shareholders.
Netflix acknowledges that Australia might experience a decline in subscription cancellations, citing the example of Spain, which lost one million subscribers in Q1 2023 following the implementation of password sharing restrictions.
