Netflix Starts Strict Action On Account Password Sharing Practices, Here's Why!

Netflix will charge a fee for users who share their account passwords (photo: Sunder Mut Hukumaran / Unsplash)

JAKARTA - Some time ago Netflix was rumored to be charging a fee for users who shared their account passwords with others, and now the company seems to be launching a massive crackdown.

Netflix's move comes as the company reveals a decline in user numbers for the first time in 10 years.

According to the streaming service, the decline in users is because many of them adopt the practice of sharing passwords or subscriptions, and because of that they use accounts without paying for them.

In a letter to users, the company said an estimated 100 million people watch Netflix using other people's accounts, which is holding back its growth.

According to data obtained by Netflix, there are 222 million paying households, meaning that half of many more people watch without paying.

"The proportionate share of accounts doesn't appear to be increasing, but it continues to be a problem. Account sharing as a percentage of our paid membership hasn't changed much over the years, but it's made it difficult to grow membership in many markets, an issue obscured by the growth of COVID-19 us," Netflix said.

Now said Netflix co-CEO Reed Hastings, the company is looking at ways to take action against such password-sharing practices.

Hastings stated this was poor performance, and it would be a higher priority to find a way to get people with shared accounts to use their own accounts, aka pay.

"We're working on how to monetize sharing. You know, we've been thinking about that for a few years. But you know, when we were growing so fast, it wasn't a top priority to work on. And now we're working really hard on it," Hastings said.

“Remember, there are more than 100 million households who choose to watch Netflix. They love this service. We just have to be paid to some degree for them."

Meanwhile, Netflix's chief operating and product officer, Greg Peters, stated that the practice of sharing accounts is still permitted, but that users will have to pay an additional fee to do so.

"If you have a sister who lives in another city, you want to share Netflix with her, which is great. We're not trying to stop that sharing. But we'll ask you to pay less to be able to share with her so she gets the benefits and value of the service." but we also get the revenue value associated with that view," explains Peters.

Such crackdowns are already taking place in several countries, including Chile, Costa Rica, and Peru, where users are encouraged to pay for additional accounts, which are offered at lower prices as a way to allow them to share accounts while paying a fee.

Peters said it would also be expanded to other countries where Netflix's market is located, including the United States (US) and the UK. Thus quoted from The Independent, Thursday, April 21.