Netflix Readies Crackdown on Password Sharing

(Image credit: Netflix)

Netflix has started signing out users accessing its service from accounts based in another home, asking them to sign back in using a code sent to the account holder's email or mobile phone.

Earlier this week, Netflix users began posting on Twitter that they’re receiving onscreen messages reading, “If you don’t live with the owner of this account, you need your own account to keep watching.” The message also instructs these users to sign back in using a third factor of identification. 

“This test is designed to help ensure that people using Netflix accounts are authorized to do so,” a Netflix rep told The Streamable

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For years, Netflix has exhibited a somewhat laissez faire attitude toward password sharing, a poorly defined but generally accepted wind drag on the revenue for virtually all subscription streaming services. The company has managed the issue by controlling the number of simultaneous streams that can be employed by tier—starting with just one simultaneous stream for the $8.99 basic package and rising to four streams at once for the $17.99 premium iteration. 

Indeed, the video streaming business in general has never responded to password sharing with nearly the existential aggression of the music industry, which got Congress to pass broad, sweeping digital piracy laws. 

But Netflix does describe password sharing outside the user’s home or immediate family unit as a violation of its terms of service

And interesting data has emerged suggesting that the sharing issue might be significant. For example, a survey of 1,000 streaming video consumers conducted by research/publishing enterprise CordCutting in early 2019 found that one in five Hulu users shared their password with someone outside their home.

Daniel Frankel

Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!