There have been rumors about the end of password sharing, and Netflix has been exploring methods to crack down on it, but the changes are set to officially go into effect next year.
Netflix has long known that password sharing is a problem affecting its profits, but an uptick in subscriptions in 2020 allowed the company to avoid addressing it. With revenue falling this year and Netflix’s first subscriber loss in 10 years, Netflix CEO, Reed Hastings stated it was time to act on the issue.
Starting in 2023, Netflix plans to ask people who share accounts with others outside of their household to pay to do so. Netflix has been testing add-on payments for password sharing in some Latin American countries, charging around $3 extra.
In these countries, the primary account owner must provide a verification code to anyone outside the household who wants to access the account, with Netflix repeatedly asking for the code until a monthly fee is paid to add non-household subscribers.
A similar tactic could be used in the United States, with Netflix possibly charging just below the cost of its $6.99 ad-supported plan for non-household subscribers who share someone’s plan. Netflix wants those who have a shared password to sign up for their own subscription.
Netflix will enforce password-sharing rules through IP addresses, device IDs, and account activity. To keep from alienating customers, Netflix may slowly phase out password sharing rather than putting a stop to it all at once.