More than a year in the making, Netflix’s long-awaited crackdown on account password sharers officially hit the U.S. on Tuesday.
In a blog post, the company said it will be sending an email to “members who are sharing Netflix outside their household in the United States.”
In its customer email, a copy of which is pasted below, Netflix encourages users to peruse their settings and see which locations and devices are accessing their accounts. Netflix asks members to log out and change their passwords should they find out that unknown/unwanted individuals are using their authentication to watch Netflix.
If someone who doesn’t live in their physical residence is using their account, and they want to keep letting them do that, Netflix offers two options: Account holders can transfer the non-resident user's profile back to the individual and let them sign up for their own Netflix account; or the person can be added to the account proper as an “extra user” for $7.99 a month.
The price is a little startling, considering Netflix was testing extra-user fees of around $2-$3 last year in Latin America. In fact, $7.99 is more than Netflix charges for its $6.99 Netflix With Ads tier.
Netflix has also set up this support page to outline the rules and restrictions for extra users. For example, extra users will maintain their own username and password, controlling everything but the bill paying. These users can only stream from one device at a time, among other restrictions.
Meanwhile, Netflix set up this page to explain what a “household” is. Essentially, Netflix users designate their household device — usually a smart TV — and any other device that uses the same IP address is part of the “household.”
Notably, this page doesn’t go into detail on what happens if you take a mobile gadget, designated as a household device, and leave the premises for an extended period of time. Does it eventually lose Netflix access?
As Netflix's early beta tests in Peru proved a year ago, “households” come in all sorts of configurations and lines of demarcation aren't always clean.
It’s important to remember that Netflix has reluctantly waded into these murky waters, with investors spending years asking what management was going to do about the account-sharing problem.
Citigroup estimated two years ago that Netflix was losing $6 billion a year on password-sharing.
Netflix said last year that at least 30 million of its customers share passwords, meaning around 15 million customers worldwide (the “shareees,” as we might call them) don‘t pay for the service.
