Netflix is making good on its promise to enforce new password sharing rules. It sent out an email to customers in the United States stating it will kick off people from the service if an account was used outside of its location for more than 30 days.
Customers who wish to have additional people on their account can continue to do so by paying an additional $7.99 per person. Netflix will encourage people to create their own accounts by allowing them to transfer their profiles.
The paid sharing service was to be launched earlier in the year, but was pushed back as countries, where it was already launched, saw massive cancellations. This change has been rolled out in countries like Australia, Britain, France, Germany and Brazil.
Backlash over Netflix’s new rule
As expected, the streaming service faced much criticism when this feature was first announced in the previous year. For the first time in a long time, Netflix recorded a loss of 200,000 customers and $54 billion dollars in value. By September 2022, the company’s shares were also down by a significant amount.
To make good on this loss, the company decided to crack down on password sharing. The goal, convert the free users into paying subscribers.
Canada, New Zealand, Portugal and Spain were early test subjects to the new rule. The immediate reaction to the news, by people in these countries, was to cancel their subscriptions. However, the company expects more revenue over time as well.
Only time will tell, what these new rules will mean for Netflix.
What happens next?
To enforce this rule, Netflix has introduced the concept of ‘Netflix Household’. People who are a part of the ‘Netflix Household’ or people who are using the same internet connection will still have access. Netflix will start sending out notifications to people who are using their services through borrowed passwords. The company will use device ID, account activity and IP addresses to determine these users.
This rule does not mention members who are from the same household but live in different locations.
The account owner will be given the choice to set a primary location and to pay for the extra people sharing their account password. The Standard plan allows for one extra person while the Premium plan allows to add two people. These extra people will have their account and password. Additionally, these people will be able to view content per the household country’s membership.
If the account owner does not pay for the extra membership fee, the free members would end up losing access to their profiles. The only roundabout way to avoid extra fees would be to use the Netflix Household devices in the secondary location, at least once a month.
Existing profiles would remain untouched unless it is transferred to a new paid account by the free user. These profiles would now be considered as part of the household. The days of sharing your Netflix password with friends and family are officially over.