Netflix's The Adam Project. (Image source: Netflix)
The password sharing party could soon be over. According to reports, Netflix will start clamping down on password sharing beginning early next year.
Researchers within Netflix have identified password sharing as a major problem affecting subscriptions as early as 2019.
While the company had always wanted to do something about it, the Covid pandemic helped averted it as it brought about a new wave of subscribers.
However, as countries around the world started opening up and with subscribers losses mounting, the company has once again turned its attention to this prickly problem. Netflix claims that more than 100 million viewers are currently watching Netflix using passwords provided by family members or friends.
According to reports, Netflix plans to ask viewers who share their accounts with others outside of their household to pay an extra fee said to be around US$3.
In these tests, viewers outside the main household will be asked to provide a code that will be sent to the primary account holder. They will be prompted to provide this code repeatedly until the additional fee is paid.
According to Netflix, accounts can only be shared by people who live together. Therefore, it would enforce its password sharing rules based on IP addresses, device IDs, and account activity.
However, the company is also wary about alienating subscribers and making the service unfriendly to consumers.
That said, the payoff could be too great to ignore. Analysts at Cowen Inc. estimate that Netflix's clamping down on password sharing could net it an additional US$721 million in revenue in the US and Canada alone where there are allegedly around 30 million password sharers.
Recently, Netflix introduced a lower-priced ad-support plan at costs US$6.99 a month in 12 countries including the US, Australia, Brazil, Canada, France, Germany, and more.
Source: The Wall Street Journal
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