Netflix's Password-Sharing Crackdown Has Begun: Everything to Know (2023)

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The end of freeNetflixpassword sharing has begun: Last week, the streaming service began rolling out a system that charges fees for "extra member" subaccounts when people outside one household use the same membership, launching in Canada, New Zealand, Portugal and Spain. More countries, including the US, are expected to get the new charges as the initiative rolls out globally.

For years, Netflix was relatively lax about password sharing. Netflix tweeted "love is sharing a password" once, and founder Reed Hastings said in 2016 that heloves when people share Netflix. But last year, Netflix started testing ways to "monetize account sharing" after recording its deepest subscriber losses in a decade. In addition to the password-sharing fees, Netflix has also launchedcheaper subscriptions supported by advertising, hoping to entice more people to pay for Netflix if they don't have to pay quite as much.

Netflix's dominance of streaming video -- not to mention years of unflagging subscriber growth -- pushed nearly all of Hollywood's major media companies to pour billions of dollars into their own streaming operations. These so-calledstreaming warsbrought about a wave of new services, includingDisney Plus,HBO Max,Peacock,Paramount PlusandApple TV Plus. This flood of streaming options has complicated how many services you must use (and, often, pay for) to watch your favorite shows and movies online.

Now, under pressure from the intensifying competition, Netflix is pursuing strategies it had dismissed for years, including an account-sharing crackdown.

How much does password-sharing cost?

The company hasn't specified prices for these new charges in the US yet, but our best guess is that extra members will cost about $7.50 a month.

Prices so far vary by country, but the latest countries hit by fees are being asked to pay more than was charged in initial tests -- that is, the fees got pricier during Netflix's official rollout.

In Chile, Costa Rica and Peru, where these fees were first tested since last year, the average charge for an extra member subaccount was priced at roughly 25% the cost of a Standard plan in each country, on average. That means ifNetflixwere to stick to that practice, then each extra member subaccount in the US would cost between about $3.50 and $4 per month.

But last week, Netflix launched the fees in the first wave of countries as part of its official worldwide rollout of account sharing. And in these countries -- Canada, New Zealand, Portugal and Spain -- the prices for extra members are meaningfully higher, sometimes twice as much. On average, Netflix set the fee for extra members in these first-wave countries at 43% the price of a Standard plan in each country.

And Canada, which is the market most closely linked to the US, is being charged the most: Each extra member is priced at nearly half what you pay for a Standard plan there.

If Netflix applies the Canadian practice to the US, then each extra member subaccount would be about $7.50.

(By comparison, Netflix's cheapest tier in the US -- Basic With Ads -- is $7 a month. And in countries where the Basic With Ads tier is available and account-sharing also just rolled out, the pricing relationship is consistent there too: The price for extra members is a bit higher than you'd pay to watch Netflix with commercials through Basic With Ads.)

Who pays the password-sharing fee?

Extra members have their own account and password, but their extra member "slot" is paid for by the account owner who invited them to join the existing membership.

Since the model creates separate log-in credentials, it isn't really password sharing anymore. (Netflix uses the term "paid account sharing.") But the main account holder will be the person paying for both the regular subscription and the new subaccount.

When will Netflix start charging for password sharing in my country?

Last week, it launched the scheme in Canada, New Zealand, Portugal and Spain. In January, Netflix indicated that a full, global rollout will take a couple of quarters.

But Netflix hasn't specified a timeline for when other countries will get the fees.

"We're ready to roll those out later this quarter. We'll stagger that a bit as we work through sets of countries," Netflix co-CEO Greg Peters said in January, referring to the first quarter of 2023. "But we'll really see that happen over the next couple of quarters."

How will Netflix enforce it? Will it block my account if I share?

The short answer is: We don't really know yet.

Netflix updated help-center pages last week that are tailored for the countries where the fees are now active, and these pages outline a system that will likely reflect the full rollout of these policies worldwide.

Unfortunately, enforcement is less clear now than it was in Netflix's previous language about account sharing, and Netflix isn't commenting on enforcement much beyond what is explained in the help center.

Netflix's enforcement also varied during the tests in Latin America,according toone report.

The current policies hinge on your account's "primary location" and the devices that connect to the Wi-Fi network there. Netflix help-center pages say your primary location is the main place you watch Netflix; you can set this primary location through a series of steps in the Netflix app on a TV. A Netflix spokeswoman said that members may get an "interstitial" message to set their primary location -- basically, a pop-up prompt on your TV's Netflix app.

Netflix's help-center pages also say that if a primary location hasn't been set, the service will automatically set one based on IP address, device IDs and account activity. However, the help-center pages also say that if you don't watch Netflix on a TV (or don't have one), you do not need to set a primary location for your account. (CNET reached out for clarification, but Netflix declined to specify further.)

Regardless, Netflix's help center also says the company doesn't collect GPS data to to determine precise physical location of your devices. "We use the IP address from the Netflix device or app to assume its general location (such as city, state/province, and postal code)," the policies state. "For example, your primary location may be displayed as 'near city, state/province.'"

You can also update or change your primary location from a TV anytime.

Previously, Netflix's help-center pages included language about "trusted devices," which were any device that logged in to Netflix on the primary location's Wi-Fi network at least once every 31 days. Netflix appears to have removed all references to "trusted devices" and "31 days" from its account-sharing policies now.

But Netflix will distinguish between devices that are accessing Netflix while traveling (which is permitted) versus those that are watching Netflix elsewhere because the viewer lives in a different household (which is not permitted). According to a spokeswoman, if a device logs in to Netflix on the primary location's Wi-Fi network about once a month, it should avoid any disruptions, according to a spokeswoman. (And, again, Netflix's policies say you can change your primary location anytime from a TV.)

But what are those possible disruptions? Previously, Netflix's help-center pages included language about device-specific blocks, as in: If a device persistently accesses an account outside the primary location, then it may be blocked from watching Netflix. But the current help-center pages now appear to have removed references to device blocks, so it's unclear how Netflix will be enforcing the restrictions against watching Netflix from a different household. A Netflix spokeswoman declined to comment further.

Can I share a low-price Basic account with extra members?

No -- at least, not in any of the countries where these fees have been activated. These "extra member" fees are available only on Standard and Premium plans, which both allow more than one simultaneous stream.

Standard plans can have one extra member, and Premium plans can have two.

So far, Netflix hasn't offered an option for these "extra member" fees on its Basic plans, which now are available in some countries as two options: a pricier Basic account that's ad-free and a cheaper Basic With Ads. In the US, the ad-free Basic tier is $10 per month, and the ad-supported level is $7 a month. (For context, a US Standard plan is $15.50 and Premium is $20.)

Both the ad-free and ad-supported Basic plans limit your viewing to a single simultaneous stream, which makes account-sharing functionally difficult.

Do extra member subaccounts have any limitations?

Yes.

Extra member subaccounts get only one simultaneous stream, and downloads can be stored on only one phone or tablet at a time.

They also can have only one profile, which can be entirely new or it can be based on a profile transferred from another account. While this single extra-member profile can set different maturity ratings, it can't be a Kids profile, which has a special look and feel designed specifically for children.

And an extra member must create the subaccount in the same country as the main account owner. (But once activated, the extra member can watch from anywhere.)

Will I lose all my recommendations if I get kicked off someone else's account or have to open a subaccount?

Netflix has created aprofile-transfer feature, which it launched last year. Profile transfer has been a key component of the password-sharing fees tested in Chile, Costa Rica and Peru. This feature lets the watch history and recommendations of a profile created on a shared Netflix account be transferred to a new, independent account. This new account can then be added to somebody else's Standard or Premium subscription plan as an extra member (for a fee), or it can be used to sign up for a separate membership (which, of course, also requires payment).

However, you can't currently transfer a Kids profile to a new, independent account. (But you can simply turn off the Kids experience for a profile, which should make it eligible for transfer.)

Did Netflix accidentally leak information and then pull it down?

Sort of.

Netflix's "help center" customer service site has country-specific pages. Because Netflix's prices, tiers and policies can vary between countries, you can toggle a help-center's page between different countries to show what's applicable in each particular market. So, for example, since Netflix was testing account-sharing fees in Chile, Costa Rica and Peru for months, you could go to Chilean help-center pages to see how Netflix was characterizing its rules for account sharing there.

Early in February, Netflix added new information tohelp-center pagesabout account sharing, and those new details remained up on pages for Chile, Costa Rica and Peru. But Netflix also posted similar information on help-center pages forothercountries too, ones that hadn't launched the initiative yet. When Netflix realized those pages for other countries were live in error, it pulled them down.

However, since then, Netflix has revamped the help-center pages for all the countries with account-sharing with different info, so none of the information that was "leaked" is even relevant anymore.

How did Netflix come up with these fees?

As noted above, the password-sharing fee system that Netflix is rolling out appears to be modeled on a scheme the company has been testing in Chile, Costa Rica and Peru since March.

Netflix tested a different concept elsewhere in Latin America. In July, the company said it was trying out a method in Argentina, the Dominican Republic, El Salvador, Guatemala and Honduras that established an account's primary residence as the "home" for the membership. If the service detected streaming at any additional households for more than two weeks, it would prompt the account holder to set up -- and pay for -- additional "homes," with a limit on how many additional homes you can add, depending on how much you're already paying for Netflix.

But Netflix appears to be dropping this "additional homes" model in favor of the other one it tested in Chile, Costa Rica and Peru.

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