As Netflix continues to grow in popularity, the issue of password sharing has become a pressing concern for the streaming giant. For years, the company has struggled to find a way to address the problem without alienating its users.
In 2019, Netflix identified password sharing as the main cause of subscription losses, but the pandemic brought a surge in new subscribers and the issue was temporarily put on the back burner. However, as subscriber losses have mounted in recent months, Netflix has decided to take action.
CEO Reed Hastings recently told senior executives that the pandemic had obscured the scope of the password-sharing problem and that the company had waited too long to address it. According to the company, more than 100 million Netflix viewers currently watch the service using passwords borrowed from family members or friends.
In an effort to address this problem, Netflix plans to end the practice of password sharing starting in 2023. The company will require those who share bills to pay for their own subscriptions. The deployment of this plan is expected to begin in the United States at the beginning of the year.
While this move may be a challenge for both viewers and the company, it is necessary in order for Netflix to continue providing high-quality content to its paying customers. "Make no mistake, I don't think consumers are going to love it right out of the gate," Netflix CEO Ted Sarandos told investors in early December, adding that it's up to the company to make sure users see value in paying for the service.
"Love is password sharing." Netflix tweeted once.
The effort is part of Netflix's response to slowing growth, particularly in the US market. So Netflix is testing some of the new restrictions in America, which include a feature that checks people suspected of sharing profiles and charges them an extra three dollars for sharing passwords.
The owner of the primary profile will also be offered a code that users need to enter to gain access to that profile. This code changes every month, making it difficult for people to have others use their profiles. It's still not clear exactly what Netflix will do to find out who all the profiles are sharing.
It currently collects various information such as device locations and profile activity, which it will likely be able to use to spot shared profiles. Netflix is also considering other options such as pay-per-view content, to make people afraid to share their profile for fear of being overcharged by other people.