Netflix on Tuesday outlined how it intends to crack down on the rampant sharing of account passwords in the U.S., its latest bid to reel in more subscribers to its video streaming service amid a slowdown in growth. To combat password sharing, Netflix said it will limit viewership of its programming to people living in the same household.
Those who subscribe to Netflix’s standard or premium plans — which cost $15.50 to $20 per month — will be able to allow another person living outside their household to use their password for an additional $8 per month, a $2 discount from the company’s standard stand-alone plan. Subscribers will still be able to watch Netflix when they are travelling. The company based in Los Gatos, California has 70 million U.S. accountholders.
The long-anticipated move, telegraphed by Netflix nearly a year ago, seeks to end a practice that the company allowed to go unchecked for years while its streaming service was attracting subscribers in droves. At that time, management had little incentive to risk riling customers by reining in password sharing. While Netflix looked the other away, an estimated 100 million people worldwide were getting passwords from family and friends to freeload on Netflix TV series such as “The Crown” and films such as “All Quiet On The Western Front.”
Those passwords were funnelled through Netflix’s 232.5 million worldwide paying subscribers, who generated the bulk of the company’s $32 billion in revenue last year.