When will Netflix start charging for password sharing?

(NEXSTAR) – Whether you’re sharing your Netflix password with someone or borrowing theirs, be prepared to start paying for it. The streaming giant has warned that a suspension of password sharing is imminent, and it seems they are almost ready to introduce some new rules.

In a letter to shareholders last week, Netflix said it expects to roll out paid account sharing “more widely” by the end of the first quarter of 2023. Netflix estimates that more than 100 million households share accounts, which “undermines our long-term ability to invest in and improve Netflix.”

Executives explained in the letter that they expect some users to cancel their accounts when paid sharing is launched, but that “borrower households” will open their own accounts.

It has not yet been announced how the paid password sharing will be implemented and how much it will cost.

The features Netflix tested in Latin America last March cost roughly $3 or $4. During last week’s earnings call, COO and chief product officer Greg Peters said the company is working to find the “right prices.”

Netflix was already exploring ways to combat password sharing in 2021 when it tested its login verification process. If a user the company suspected was not the account owner tried to log in, Netflix would send a code via email or text to the account owner. That code had to be entered within a certain time limit, otherwise the user would not be able to access the service.

In March 2022, Netflix began testing two new features – one that allowed members to add a sub-account for people living outside their household for a small fee, and another that allowed users who share an account to transfer their profile information to a new account or sub-account – in Chile, Costa Rica and Peru.

In these countries, Netflix warns that devices connecting to your account outside of your household may be blocked. Netflix can detect devices outside your home using information such as “IP addresses, device IDs, and account activity from devices signed in to a Netflix account.”

A month later, executives again hinted at a crackdown after blaming password sharing, as well as increased competition from other streaming services, for the first subscriber loss in more than a decade.

In July, Netflix tested a special feature in a second round of countries that allowed users to purchase additional “homes” to use a TV or TV-connected device outside of their home, The Verge reports. Users could purchase an additional “home” to allow users to access Netflix outside of their home. Any TVs that weren’t connected to the additional home were blocked after two weeks, Netflix said.

Then, in November, Netflix launched a new feature that lets you see the devices that have streamed from your account and unsubscribe the ones you don’t want to have access to “with just one click.” While Netflix suggested using this feature to sign out of a hotel TV or a friend’s device while traveling for the holidays, you can also remove any device using your login.

Netflix’s move to address password sharing is a departure from the company’s previous view of common practice. Then-CEO Reed Hastings (he stepped down as CEO last week) said in 2016 that Netflix would not charge users for sharing their passwords. Instead, he called password sharing “something you have to learn to live with,” CNBC reports.

Hastings has also never been a fan of ads, calling them a distraction from the fun the service provides. But in November, Netflix launched a fourth plan, “Basic with Ads,” which includes “an average of 4 to 5 minutes of ads per hour.” Users on this plan also don’t have access to Netflix’s full library.

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