Streaming behemoth, Netflix, has officially begun cracking down on indiscriminate password sharing amongst its users, as rumored last year. The company unveiled its new policies on the subject via a recent update to its FAQ pages in Costa Rica, Peru, and Chile – countries where it started testing additional membership fees for account sharing last year, a feature it could very well incorporate globally soon.
According to the update, members of the same household will be required to set a primary location for their Netflix accounts going forward. To do this, they are required to connect their TV, which should be signed into the Netflix account, to the Wi-Fi network of their home. Following this, users should connect their devices to their home’s Wi-Fi network to show they live there and maintain their access.
The FAQ goes on to state that only the people who live at the primary location will be able to access the account whether at home or on the road. Consequently, the company may block devices that are not connected to the primary location’s Wi-Fi network, but still, attempt to use the account.
The new policy also requires users to connect to the primary location’s Wi-Fi network at least once in 31 days for continued access. Failure to do this will be risking disconnection from their Netflix account. According to the updated FAQ page, "To ensure that your devices are associated with your primary location, connect to the Wi-Fi at your primary location, open the Netflix app or website, and watch something at least once every 31 days."
For those who don’t connect to their primary location’s Wi-Fi network within 31 days, the new policy makes a provision for them to continue accessing the account for seven days, provided they can verify their device via email or text.
The page goes on to state that Netflix will automatically set a permanent location for users, "based on IP address, device IDs, and account activity," who don’t do so themselves. Also, setting a primary location is only required from families who watch Netflix on their TVs with the update stating that users who only access the platform via their devices should not bother with the feature.
Password sharing is one of Netflix’s biggest problems. In early 2022, following its first subscriber loss in 10 years, the company’s former CEO, Reed Hastings, blamed account sharing for the company’s revenue loss, revealing that 100 million households engage in the practice. In a letter to shareholders last month, the company reiterated Hastings’s stance stating that account sharing is undermining its "long term ability to invest in and improve Netflix, as well as build our business." With these new measures, Netflix can finally address a major impediment to its business growth and profitability.
It's worth mentioning that anti-password sharing measures are not the only strategy Netflix is pursuing to increase its bottom line. The streamer introduced a cheaper ad-supported subscription tier late last year to give users more price options. However, the strategy hasn’t paid off just yet, with the plan scoring the least new subscribers following its launch.