Netflix rolling out password sharing protections in U.S., U.K.

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Netflix has started notifying U.S. and U.K. users that it’s cracking down on password sharing outside of a single “household.”

The streamer is sending emails that appear to be targeted to subscribers whose accounts have been accessed from multiple locations.

The email gives instructions on how to identify who’s using a particular Netflix account and notes that subscribers with non-ad-supported plans can add more households for $7.99 a month, a feature it calls an “extra member” or “extra home.”

This feature is not available on accounts billed by third parties or on ad-supported plans. Standard members can add up to two extra members, while premium plan subscribers get up to three.

This approach creates separate accounts for these extra members, each with their own username, password, profile and viewing history, but the primary account holder is ultimately billed for each one. There is no option to “split” billing.

While the extra $7.99 a month does represent an additional cost, it still does offer a slight advantage over buying two completely separate accounts. Ad-free Netflix starts at $15.49 a month while ad-supported plans cost $9.99.

In additional supporting pages, Netflix defines a “household” as “… a collection of the devices connected to the internet at the main place you watch Netflix.”

Netflix says it uses a mix of IP addresses, device IDs and account activity to determine whether a device is part of a household or not. It says it does not use GPS tracking to make this determination or attempt to determine a physical location of each device.

The lack of GPS tracking could be a way of both reducing privacy concerns and also making an allotment for devices used out of the house, such as streaming via mobile devices from vehicles or when out and about, perhaps with the provision that those devices have been connected to the primary network at some point.

Additional information, however, indicates that changing wifi networks or other connectivity settings could cause a device to be flagged as out of a household inadvertently and the company encourages users to stick with the same wifi networks when possible.

Under the new system, devices that are believed to be new or outside of the household will trigger a secondary authentication step that requires entering the correct confirmation code within a set time period.

While the second step would add a layer of complication and require the cooperation of the primary account holder, it notably does not necessarily prevent people from two different households sharing an account. It would, in theory, largely eliminate sharing between ex-friends and partners given that it would require the main account holder to provide the code with whoever is trying to log in.

Netflix did not say what actions, if any, it will take against those accounts it believes to be circumventing the definition of “household.”

Netflix did acknowledge that it may see some cancellations, particularly when the rollout starts. It says it anticipates that the cancellations could be similar to when a price increase is rolled out.

Netflix has long acknowledge that users likely share passwords and started cracking down on the practice in recent years. It ran tests in select markets using a similar approach of giving users the option to add separate accounts for a small added fee.

It was originally slated to roll out this approach in the U.S. market earlier in 2023, but delayed it until May 2023.

While all streamers are aware of password sharing, Netflix has notably been the most aggressive in trying to cut down on the practice thus far.

Other streamers largely ignore the issue or remain quiet on it. Account sharing is typically is against the terms of service users agree to when signing up, but it’s rare to hear of a streamer taking actions against abusers except in extreme cases.

That said, it’s likely that other streamers are keeping a close eye on Netflix’s approach as the entire category is looking to boost profitability.

Like Netflix, most streaming services do limit the number of simultaneous streams that can be active at any one time on a single account, a limitation that could limit the practicability of account sharing.