Netflix cracks down on Password Sharing with a New Test

This article reports on Netflix's new test to prevent password sharing by requiring users to verify their accounts through a text or email code.

By Keira Manifold

May 27th, 2022

Netflix Cracks Down on Password Sharing

Netflix Cracks Down on Password Sharing with a New Test

It is the common practice of sharing passwords of Netflix accounts among family and friends which according to the company will no longer be possible. The company is testing its new features which will restrict password sharing and only authorized users will be able to watch Netflix content

Netflix cracks down on selected users and users are getting a prompt message on their screens to sign up for their own account if they are not watching with the subscribers.  

The message reads: “If you don’t live with the owner of this account, you need your own account to keep watching.”

Users need to enter the code that was sent to them by text or email or join with their own account to Netflix to continue watching. However, viewers have been given the option to delay verification and keep watching Netflix.

Reed Hastings, Netflix co-founder, and chief executive, during a 2016 webcast, said: “Password sharing is something you have to learn to live with because there’s so much legitimate password sharing, like you sharing with your spouse, with your kids, so there’s no bright line, and we’re doing fine as is.”

Greg Peters, chief product officer, in October 2019 said the company was looking at the issue of password sharing but said it had no “big plans to announce at this time in terms of doing something differently there”.

The test has been applied for account security as well as sharing passwords. However, this decision has yet to be made as to whether the company will roll this out across its network. 

The most popular streaming app’s viewership has skyrocketed during the pandemic Netflix reached 200 million users last month and its stock is up nearly 50 percent since March last year. 

It has been estimated that around 33% of the total Netflix users share their password with at least one other person which makes up to one-third of its users share the password. Netflix has three plans for the user: Basic, Standard, and Premium. The basic plan costs $8.99 which allows one user to watch at a time. The company’s standard plan costs $13.99, in which users can watch Netflix on two screens at the same time and the Premium plan costs $17.99 which allows four screens to watch at the same time. That is why it is commonly practiced to share the Netflix password among peers. 

Nevertheless, Netflix cracked down on Password Sharing, as the company is having strong growth in the number of subscribers thus its stock price offset any concerns about lost revenue.

It is inevitable that the company is facing intensive and increasing competition from rivals globally. The major competitors of Netflix are Amazon’s Prime VideoDisney +, Comcast’s PeacockAT&T’s HBO Max, and Viacom CBS’s Paramount+. This market competition puts pressure on increasing new subscribers, keeping existing customers happy with the service, and overall revenue growth.