Prior to the crackdown, Netflix stated that its reputation as one of the top streaming services was being weakened by users sharing accounts, so it needed to take a firm stand against password-sharing. Netflix has raised prices once again and acknowledged that it produces too many bad movies, so you would think that with all of the extra money it’s bringing in, the service would be better than ever.

And it seems that the experiment has worked wonders. The streaming giant has added over 9 million subscribers in the first three months of 2024, hitting a record high of 269.6 million subscribers.

Now its rivals have understood the message that harsh measures against password cracking are not counterproductive. So the streaming industry is now following in similar footsteps. Disney Plus’ measures will start in June 2024 itself, with Disney CEO Bob Iger announcing that the password-sharing crackdown will begin in “just a few countries in a few markets” before expanding to all subscribers in September.

On the other hand, Warner Bros. Discovery will roll out an option for members to pay for “extra members” streaming with their Max subscriptions to have their own username and password as part of its upcoming effort to curb account-sharing.

Through this article, International Finance will talk in detail about Netflix’s crackdown against password-sharing, how the streaming giant enforces its policies and what your options are if you want to continue sharing your account with your near ones.

Understanding the maths

As long as they all reside together, multiple people can use and share a single account on Netflix, according to the company’s updated password-sharing guidelines. However, it is no longer permitted if you and your near ones live apart but share a Netflix account.

In accordance with the latest restrictions, you will be required to designate a “primary location,” which Netflix will probably ascertain using the IP address of your device. Those who don’t live there will have three options once this primary location is determined. These options are: abandon Netflix, sign up and pay for their own private Netflix account, pay an additional fee and become an “extra member” to the existing account.

A few advantages do come with this additional member feature. One of the main advantages is that the cost is less than that of a stand-alone “Standard” or “Premium” membership, although there are some limitations.

First of all, access to it is restricted to primary accounts that are either “Standard” or “Premium” tier subscribers. Second, only one additional member may be added to a “Standard Subscription”. However, two additional members may be added to a “Premium Account.”

Therefore, even if your friends and family are ready to contribute additional funds, you are unable to add an infinite number of them to any paid account. Although the account-sharing policy was first implemented in places like Canada and South America, Netflix currently has enforcement in 103 countries, including the United States, the United Kingdom, and Australia.

You probably already received an email informing you of your options if you live in one of those regions and have a profile (or profiles) on your Netflix account for someone who is not a member of your household.

The section below titled “How much is Netflix charging for password-sharing?” will tell about how much it will cost to add an “Extra Member” to your household.
Though some information that has since been taken down from Netflix’s official FAQ gives us a good idea, the company hasn’t stated clearly how it determines whether someone using your account lives with you.

Netflix stated that it will use information like “IP addresses, device IDs, and account activity from devices signed into the Netflix account” to ascertain whether a user of the service resides in the same home as an account.

Netflix will ask the user to authenticate their device if it suspects that they are not a member of the household and may be attempting to circumvent its policies regarding password-sharing. A one-time code will be sent to the email address or phone number associated with the account; the user will have 15 minutes to enter the code or else their Netflix account will be locked.

For a short while, there was a slight change in the rules: a user would now need to log into Netflix “at least once every 31 days” using the household’s Wi-Fi connection in place of this verification method.

After this deadline passed, the only ways to get back in were to create a new Netflix account, use a seven-day code that was only good for that one time, or add the device as an additional member. However, Netflix subsequently made it clear that these guidelines were only applied to users in Peru, Chile, and Costa Rica, the only countries at the time that could afford to add more members.

Netflix Help Centre’s “Sharing your Netflix account” section says, “Netflix accounts are intended to be shared by individuals residing in the same household.” According to the statement, which defines a household as “a collection of the internet-connected devices at the primary location where you watch Netflix.”

To watch, visitors from other households must create an account on their own or purchase an “extra member” slot for your account. Netflix can modify its password-sharing detection algorithms to make them harder to hack by keeping them secret.

You’ll have to start paying if you want to continue lending out your Netflix account to people who live elsewhere in your home. One additional non-living member may be added to a “Standard Netflix” account, while two additional members may be added to a “Netflix Premium” subscription.

Analysing the cost factor

Here’s the cost of doing that for each new member in the US, UK and Australia: $7.99 p/month, £4.99 p/month, AU$7.99. As you can see, that is almost as much as a basic Netflix plan would normally cost. And since that cost is per person, you would need to double the aforementioned amounts if you wanted to add two people to your “Netflix Premium” account.

You can add more members, but each member must pay the additional membership fee. Each additional member will have their own password and account. Even though adding more members is more expensive than purchasing a Premium tier subscription, which costs $22.99 / £17.99 / AU$22.99, especially in the US and UK, it is still less expensive than other regions.

Netflix is a feature that many Sky subscribers enjoy. In an effort to “confirm this TV is in your Netflix household,” some of these users have recently reported receiving notifications about password-sharing as part of the Netflix crackdown.

Customers will “only be able to share your Netflix account in one household (location/address),” according to a special guide released by Sky in response to the problem. For customers of Virgin and BT who have Netflix included in their TV package, the same seems to be true.

These users’ inability to utilise the additional members option is the problem. According to confirmation from Sky, users who have Netflix access as part of their TV package cannot access this feature. It will therefore be necessary for them to get a separate Netflix subscription if they wish to share with individuals outside of their household.

Interestingly, when primary Sky account holders are not at home, they can still watch Netflix on their laptops, phones, and tablets. Their requirement to connect their devices to their home Wi-Fi connection once every thirty days is the only limitation. Thus, theoretically, in order to keep access to someone else’s Netflix account, that person would only need to come home once a month.

You may be concerned that you won’t be able to access Netflix from overseas if your account is linked to a certain Wi-Fi network and you take a vacation. Fortunately, the streaming giant has stated that even with these new limitations, you will still be able to access your preferred Netflix content while travelling.

The best virtual private networks, or VPNs, have become extremely popular in recent years because they enable you to stream content from Netflix that isn’t available in your area. When you use a VPN to access a website or online service, your connection first passes through the encrypted servers of the VPN provider before arriving at its intended destination. When it does, the VPN is able to use the server’s information in place of your device’s actual information, including its IP address, protecting your private data.

However, Netflix may not want users utilising tools that hide this data if the streaming service wishes to use a device’s information and IP address to confirm whether or not users are in a household. It is possible for people who are not living together to connect to the same server and appear as though they are using a VPN.

Netflix currently states that “you can use a VPN with Netflix on the Basic, Standard, or Premium plans,” but it’s unclear if this will change if users are able to circumvent the company’s new password-sharing policy by using a VPN.

It might simply request that VPN users authenticate their devices each time they access Netflix, but it might also adopt a much more strict policy against VPN use.

Netflix crackdown: A success story

Will Netflix persist with its password-sharing crackdown? The answer is yes. Netflix has indicated licensing content from other studios, apart from bringing back some of the iconic shows from the 1990s. The streaming giant has also expanded into live and sports programming in 2024. In February, Netflix aired its first-ever awards show, the Screen Actors’ Guild Awards, and announced a 10-year deal to air “WWE Raw” live, valued at more than $5 billion.

Alicia Reese, an equity analyst who covers Netflix for Wedbush Securities, sees other growth avenues for the venture, including its newer advertising-supported subscription tier. The ad tier, costing $6.99 per month in the United States, significantly less than Netflix’s other subscription plans, has seen significant growth since it was introduced in late 2022. In January 2024, Netflix’s ad-tier had more than 23 million users.

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According to Nielsen data, the high volume of viewing overall increased streaming’s proportion of TV to 38.7%, setting a new record. Amazon Prime Video, Netflix, and YouTube all reached record highs.

At 20% of TV viewing for the month, total broadcast viewing was down 3.6% overall, setting a record low. The use of broadcasts decreased by 5.4% on a yearly basis, the survey found.

In July, cable viewership declined as well, dropping a full percentage point to 29.6% of all TV viewing.

Less than 50% of all TV viewing today comes through linear TV.

According to the survey, “watching among those under the age of 18 grew 4%, and viewing among individuals 18 and over declined 0.3%, even if overall TV consumption was up just slightly from June (0.2%).”

These developments led to a rise in streaming and “other” consumption, especially because of gaming consoles.

Comparatively, sports on broadcast generated about 25 billion viewing minutes in July in the US, despite airing on numerous channels.

Fall’s arrival will probably bring a change in TV viewing habits, especially with the start of a new NFL season.

For instance, sports accounted for 150 billion viewing minutes on broadcast in November 2022.

According to the research, “Broadcast and cable may face a unique position this fall with the prospect for less fresh original primetime material, but the recent success of purchased programming on streaming channels underscores the outsized strength of exceptional content, regardless of when it was made.”

“Linear TV [is] past the point of no return,” Macquarie analyst Tim Nollen wrote in a note to clients, adding that the revenue line for cable and satellite operators is “probably permanently negative” as pricing fails to drive upside while TV advertising growth stalls.”

“We think the metrics for linear TV are all bad. Ad revenue across our media network coverage fell 13% on average in Q2, down from -8% in 1Q, which included the Super Bowl. We forecast the second half of the year will get slightly better, but to remain negative including an off-political year comparison,” the analyst added further.

The Nielsen report comes amid more consumers dropping their cable packages in a trend known as “cord-cutting” and instead opting for streaming services that are deemed to be traditionally less profitable for media companies.

“Still, streaming is not exactly outperforming either,” Nollen warned, as he stated that subscriber numbers at major direct-to-consumer services (DTC) including Peacock, Disney+, Hulu, ESPN+, Paramount+, Max and Discovery+ were down by about 500,000 combined.

“Global DTC subscriber growth was 8.5% year-over-year (YoY), slowing to single digits for the first time,” the analyst wrote further, while adding that the growth was aided by Netflix’s password-sharing crackdown, which helped the leading video streamer add 5.9 million subscribers in the second quarter.

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According to online news website Rappler, the show will be the first miniseries from the Philippines to be streamed on Netflix starting April 9.

Robert Roy, vice-president of Content Acquisition at Netflix, said in a statement, “We’re always seeking to work with passionate, talented storytellers like Mr Mendoza, to bring premium content to the more than 117 million Netflix members around the world.”

The show tells the life story of a high-school student Joseph mired in violence and corruption.

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