Coming in the next few months, the crackdown on Netflix password sharing means you’ll soon need to pay extra to share your account with someone who doesn’t live in your home.
When Netflix first arrived on the scene, it promised salvation for Australians who were sick of paying more than $100 every month to watch all their favourite shows on traditional pay TV services like Foxtel. The new streaming upstart delivered a wealth of entertainment for only a few dollars a month, allowing “cord cutters” to cut off their expensive cable TV.
The problem was that content giants like Disney and Paramount decided to cut out the middleman and go direct with their own streaming services. At the same time, tech giants like Apple and Amazon also demanded a slice of the streaming pie, along with homegrown offerings like Stan from Nine Entertainment.
The fragmentation of content across so many streaming services has left us back where we started, needing to fork out more than $100 per month to enjoy all that streaming video has to offer.
Netflix password sharing no more: a brief history
As more and more streaming services emerged, the idea of trading passwords with family and friends became more attractive. Even more so amid the backdrop of rising interest rates and soaring inflation.
Netflix has long looked the other way when it comes to subscribers sharing their account with family and friends who don’t live in the same household. That’s set to change, as Netflix faces growing competition and its first-ever global membership decline after more than a decade. To rub salt into the wound, the company’s otherwise great library of games has gone largely untouched.
To start with, the Netflix password sharing crackdown began with testing account-sharing charges in Latin America. The idea is to add fees for “extra member” subaccounts when people outside one household use the account.
At the same time, Netflix has also launched a cheaper subscription tier which includes advertising, in an effort to win over people on a tight budget.
There’s no place like home
Netflix’s help centre pages say that it detects an account’s primary household by studying the IP addresses, device IDs and account activity from devices logged in to that account.
If your account is regularly accessed from a different location outside your household, or if someone signs into your account from a device not associated with your household, Netflix says it may ask the primary account owner to verify. It will send a link to a four-digit verification code to the email address or phone number associated with the main account. This code must be entered into the offending device within 15 minutes, or you’ll need to request another code.
Time to pay up
Netflix is yet to put an exact price on password sharing in Australia. But based on tests in Chile, Costa Rica and Peru, the fee will likely be roughly equivalent to one-quarter the price of a Standard plan – which makes it around $4.25 in Australia.
Account-sharing fees are set to expand to other countries by the end of March, but it will be staggered and the full global rollout will likely take until the end of the year. The option to pay more for extra member subaccounts will be available on Standard and Premium Netflix accounts, but probably not basic single-stream accounts.
In Latin America, Netflix saw a short-term backlash to the crackdown but says “engagement [is] growing over time” as people come to terms with the change and sign up for their own accounts.
Netflix’s password sharing crackdown will encourage some households to create their own accounts, and the streaming giant has made life easier for them with its new profile-transfer feature. This ensures they won’t need to start from scratch and lose their watch history and recommendations.
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