Tech Insight : Netflix Plans To Tackle Password Sharing

  • March 15, 2023
  • News

Here we look at how popular streaming service Netflix has faced a user backlash on social media after it accidentally posted what appear to be some unpopular plans to tackle password sharing on its platform.

What’s Been The Problem? 

In recent years, and particularly during the pandemic, Netflix has faced the issue of password sharing, where Netflix users share their login credentials with friends or family members who don’t live with them or don’t have their own account. This has resulted in lost revenue for Netflix as the company has missed out on potential subscribers who have shared accounts instead of paying for their own.

Pressure mounted in Netflix (and other streaming platforms) following the Intellectual Property Office in December highlighting how password sharers could be breaking copyright law and that streaming services themselves have a responsibility to enforce it.

Netflix, therefore, has faced the challenges of how to tackle the password issue without alienating paying customers and losing them to competitors like Amazon Prime and Disney+, in addition to trying to reverse falling subscriber numbers, while increasing revenue.

What Has Netflix Done To Address The Issue? 

Netflix has taken several measures already to address password sharing, including:

– Limiting the number of simultaneous streams. Netflix has set a limit on the number of simultaneous streams that can be accessed with a single account. Depending on the subscription plan, users can stream on one to four devices at a time.

– Testing verification measures. Netflix has tested different verification measures, such as sending a verification code to the account owner’s email or phone number, to ensure that only authorised users are accessing the account.

– Partnership with TV manufacturers. Netflix has partnered with TV manufacturers to embed the Netflix app into smart TVs. This makes it easier for users to access Netflix without needing to log in with their credentials each time.

– Focusing on content. Netflix has emphasised the importance of creating original content that is only available on the platform, which encourages users to subscribe rather than rely on password sharing.

– Trying to encourage account sharers to move of their own accord. Netflix has done this by letting people transfer their profile to a new account.

– Trialling (in South America) the allowance of people to add sub-accounts for up to two people they don’t live with for an extra £2-£3 a month.

New Measures Revealed 

The latest proposed measures to tackle password sharing were reportedly posted by mistake recently on a help page, which has since been changed. It’s been reported that these new measures, which come into force in the UK later this month, include:

– Access to the Netflix service will be limited to a single primary location (called a “Netflix household”) based on the account holder’s wi-fi network and the devices connected to it. If moving house, an account holder can request a change of primary location via the “get help” section in the Netflix app. Users will also be able to the platform while temporarily away from home on verified devices, but will need to use their chosen device to watch the service over their home wi-fi before they leave in order to verify the device they watch Netflix on for seven consecutive days

– Users must verify the devices they watch Netflix on at least once every 31 days.

– As was trialled in South America, Netflix customers will be able to buy an extra member slot for their existing accounts for an additional small fee.

– Extra members will be able to watch Netflix from anywhere but must create their account in the same country as the account holder’s.

Backlash 

Examples of the kind of criticism that Netflix received on social media in a backlash against the reported new anti-password sharing measures include:

– Suggestions that requiring monthly logins and travel codes could give the impression that Netflix is treating customers like criminals.

– Criticism that the measures don’t appear to take account of long-distance relationships and families with children at college or university.

– Criticism that users can’t use their Netflix account if travelling for more than 7 days.

What Does This Mean For Your Business? 

Netflix needs to increase its revenue and get at least something more from the estimated 100 million households that are password sharing. While it was happy to sign up vast numbers of users during the pandemic, leaving the password-sharing loophole open for some time means that it now faces some serious challenges. For example, taking away a feature that customers have become used to and valued, adding more hoops to jump through in terms of verification, asking for more money for the same service, and imposing new rules at a time when they have stiff competition (i.e. low barriers to exit) from the likes of Amazon Prime and Disney+  could see many users simply jumping ship. This is, therefore, a risky move and a dangerous time for Netflix and it is likely that competitor streaming platforms will be stepping up moves to highlight the comparative benefits of their service and offers to help tempt disgruntled Netflix users into switching.

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