Netflix is now limiting password sharing

On Tuesday, executives from Netflix Inc. revealed the company’s plans to restrict account sharing in advance of the launch of the streaming service in early 2019.

In a letter to shareholders that was included with the company’s third-quarter results report, officials from Netflix NFLX, -0.14%, said that the firm would soon make it possible for account users to move their profiles to their own subscriptions. Users of an account will also have the option, although at an extra expense, to set up “subaccounts” to share their Netflix membership with their family and friends.

According to the letter, the business has “arrived at a logical approach to monetize account sharing,” and “we’ll begin rolling this out more broadly starting in early 2023.” “Sharers” will soon have the ability to better manage their devices and even construct subaccounts (“extra members”) to pay the expenses of their friends and family members who also use Netflix. This feature is a direct reaction to comments provided by users.

The idea sounds very much like the tests that Netflix has been doing in Latin America, which came about after management said earlier this year that they would attempt to put a stop to the practice of exchanging passwords. During the trial period, customers were only able to access Netflix from inside their own homes; however, they were required to pay an additional $2.99 per month in order to watch the service from multiple places.

The administration of Netflix has long been aware of the fact that consumers share their passwords with one another, which gives others the ability to use the streaming service without paying, but they have always denied any worry about the matter. This began to change earlier this year when the company revealed its first annual loss in customers; at the time, company officials estimated that approximately 100 million homes were using the service without paying, despite the fact that the service had approximately 222 million paid members. This caused this situation to begin to shift in a different direction.

However, after years of enabling password sharing to flourish, it seems likely that Netflix may suffer a backlash from customers.

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