Everything you need to know about Netflix's password sharing crackdown

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After years of turning a blind eye, Netflix is starting to get serious about password sharing.

In 2016 on the cusp of subscriber growth, Netflix described password sharing as a "positive thing". It reasoned that people you share the password with eventually sign up for accounts.

Fast forward to 2023. Netflix reported that its subscriber base has shrunk for the first time in a decade and said that password sharing was part of the problem.

It doesn't help that the competition has grown significantly since 2016. In this fight for subscribers, Netflix will do anything to maintain its bottom line.

The company said that "widespread account sharing (100M+ households) undermines our long-term ability to invest in and improve Netflix, as well as build our business."

Also Read | Netflix slammed for using AI artwork in anime instead of paying an animator 

Is password sharing illegal? 

That depends on who you ask. The UK's Intellectual Property Office (IPO) has said that anyone sharing passwords for streaming sites like Netflix, Prime Video or Disney+ is breaking the law.

"Piracy is a major issue for the entertainment and creative industries," says the IPO in a post. "Accessing films, tv series or live sports," or using hacked devices to watch them, "without paying for a subscription is an infringement of copyright, and you may be committing a crime."

Netflix's rules on sharing passwords prohibit you from sharing your account with anyone not from your household. It means friends and family not sharing a home cannot share accounts.

Netflix already detects devices within one household using "IP addresses, device IDs, and account activity from devices signed into the Netflix account."

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When will the crackdown start? 

It has already begun. Netflix is already piloting a new program that will let people add new sub-accounts at a cost.

It is limited to Chile, Costa Rica, and Peru, but it might be rolling out in the US soon. It even announced a new profile transfer tool to move profile data, watch lists, history, and recommendations to a new account.

During its quarterly earnings call in October, Netflix said it would start charging for additional sub-accounts in "early 2023".

Netflix will also start asking users to verify their accounts, likely to track the number of devices they use.

"We are going to offer the ability for borrowers to transfer their Netflix profile to their own account," wrote Netflix in their Q3 2022 report.

"And for sharers to manage their devices more easily and to create sub-accounts (“extra member”), if they want to pay for family or friends," it added.

Also Read | Netflix tumbles as 200,000 users exit for first drop in decade

How much will Netflix charge for a sub-account? 

Netflix has not announced official prices yet, but as Engadget reports, the current pilot program in Chile, Costa Rica and Peru, charges roughly a quarter of the standard subscription fee.

The Netflix Premium Plan costs Rs 649 per month in India. So it might cost you an additional Rs 162 per sub-user, as an example.