Netflix account sharing: crackdown, limit, 2023, changes

Netflix account sharing: crackdown, limit, 2023, changes

By April 2023, Netflix will put an end to account sharing, a very popular practice that is causing it to lose a lot of money. Netflix has warned about this change for some time now and has finally revealed its method for detecting shared accounts. In this article we look at how Netflix plans to impose tighter restrictions and when they will put them in place.

Why is Netflix limiting account sharing?

For several months now, the streaming platform has shown its desire to no longer allow users to share their account with people outside their home. "People who don't live in your household will need to use their own account to watch Netflix. Netflix is easy to subscribe to and there are plenty of offers. As always, the subscriber can switch offers or cancel their subscription at any time," the company's help pages state. And this measure should come into effect from the beginning of 2023 in the United States, according to the Wall Street Journal. According to the platform, 100 million people take advantage of Netflix without paying, thanks to the password of a relative. 

Netflix wants to prevent users from sharing their accounts because they are currently losing out on potential revenue from countless people not paying for its services. The situation is no longer tenable for Netflix, because "the widespread sharing of accounts between households that takes place today compromises our long-term ability to invest in and improve our service". This decision to reduce account sharing comes off the back of reduced subscriptions to the service, possibly because the amount of people wanting a Netflix account is slowing, possibly because of the large amounts of competition for subscription services coming from Disney++, HBO, Amazon Prime among others. 

© Netflix

What are Netflix's password sharing rules?

Currently, Netflix allows "anyone who is a member of your household, that is to say who lives with you and therefore shares your main address, can use your Netflix account". To avoid possible squatters, the SVOD will therefore geolocate each connection via the IP address, which users agree to share in the general conditions of the service, the ID and the activity of the account in question in order to be sure. At first glance, this raises some questions, given that a single account may very well have very different IP addresses depending on the terminal used: a PC at home, a smartphone with 5G, a tablet at work and a television in a secondary residence for example. Suffice to say that Netflix's new method is likely to be quite restrictive in view of the operation of "nomadic" streaming.

How will Netflix verify account sharing?

If the device used to watch Netflix uses the primary account holder's household internet connection, the platform will not ask for any verification. One can legitimately wonder what it is for those who watch series on the way to work or for children who alternate between the homes of their divorced parents. In this case, Netflix requires that the device connects to the primary household Wi-Fi at least once every 31 days. Beyond that, and this is also the case for any connection from a new device, the platform will carry out a "verification". Specifically, it will send a link to the email address or phone number associated with the owner of the main account containing a four-digit code. This must be entered within 15 minutes of receiving it. This verification "may be required periodically". In and of itself, nothing that you can't work around, as t the account holder can always send the code to the person sharing the account. Although this still complicates the operation, since you may not be reactive enough and being often solicited can discourage account sharing. 

Note that in countries where account sharing has already been abolished, subscribers who use someone else's account for a fee have almost the same rights as host subscribers, with the exception of the possibility of creating sub-profiles. Netflix tries to be reassuring by explaining that "we will not automatically charge you if you share your account with someone who does not live with you". The platform is well aware that at the beginning of the entry into force of this measure, "the first reaction of the users concerned is to desert the platform, which will have an impact on the growth of subscribers in the short term. But then, the households will activate their own accounts and additional member accounts." In theory this should work for Netflix, however they might underestimate people's reluctance to pay for something that they previously had for free. And in an age where a family can have multiple streaming accounts, and share the costs between the family, suddenly having to pay for Netflix may limit its appeal. 

When will Netflix account sharing limits start?

The end of free account sharing finally has an official date, and it will be for the end of the first quarter of 2023, as the streaming giant announced in a letter sent to shareholders on January 19. "We plan to roll out paid sharing more widely in the first quarter of 2023," the company writes. "While our terms limit Netflix use to a single household, we recognize that this is a change for members who share their account on a larger scale,". The platform is also considering launching a "free television with advertising" (FAST) formula, that is to say a formula entirely financed by advertising.

How much will it cost to share an account?

According to The Wall Street Journal, Netflix initially considered adding paid content to its catalog – much like Amazon Prime Video – hoping that the fear of seeing their bills climb would encourage users not to share their passwords. However, it discarded this idea to keep a simpler interface. Instead, they think they can rely on the IP address of the internet connection used to log into the account and account activity to track account sharing and charge for additional users. A measure that has already been tested in Latin America which has forced many users to choose to pay for sharing, at the risk of paying even more for an individual account, according to internal sources relayed by the Wall Street Journal.

© Netflix

No official price has yet been established, but the specialists evoke a price corresponding to 3 to 4 dollars per month for the sharing option. Cowen Inc. analysts estimate Netflix's effort could generate $721 million in additional revenue next year in the United States and Canada, where there are around 30 million sharers, but some analysts believe that the company underestimates the impact and "collateral damage" that this policy change could cause, as some customers may prefer to simply cancel their Netflix subscription.

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