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Netflix is cracking down on password sharing; here is why

Sharing Netflix passwords among friends and family has been the norm, but the streaming platform is no longer looking the other way as it plans to crack down on the practice.

Faced with slowing growth and increasing budgets, Netflix appears to be pursuing how to plug revenue leaks. One of them is the common practice of sharing passwords with other users, something the streaming company always knew about but chose to ignore.

Netflix has already announced it is trialing a password-sharing monitoring system that will prevent people outside your household from using your account password. The system involves adding up to two additional members to a Netflix account as sub-accounts. This will soon be offered to Netflix users in Chile, Costa Rica, and Peru, although it will attract about $3 extra per month.

Explaining why Netflix is going after accounts that share their passwords, Chengyi Long, director of product innovation, says, “While these [household plans] have been hugely popular, they have also created some confusion about when and how Netflix can be shared. As a result, accounts are being shared between households — impacting our ability to invest in great new TV and films for our members.”

This is a big difference from Netflix’s stand in the past, with the CEO saying sharing passwords was a net positive for the company, even though technically, it wasn’t supposed to happen.

It makes sense that Netflix will go after password sharing at this point. Thanks to such a practice, the streaming platform has become a household name, and some people might decide to become legit users because they can’t bear not having access to the service. In other words, Netflix is close to being an essential service in many households.

Richard Greenfield, an analyst at Lightshed, explains to The Verge, “Netflix has let it go for a long, long time. When something becomes so important to your daily life, it makes it easier and easier to crack down on things like password sharing.”

Also, Netflix is big enough to absorb any negative impact from subscribers that may abandon the platform because of this move. With its track record of great exclusive shows, it doesn’t have to lose sleep over competitors that may try to tempt users away by subtly promising to allow password sharing.

Netflix needs to make money, like everybody else in the business. It has recently increased its subscription fees, but apparently, that was not enough. Some of its competitors have introduced ad-supported plans to either make more money or reduce the impact on the subscriber’s wallet. However, Netflix has refused to use ads to augment its revenue.

With new users getting more challenging to find, as most people who want streaming have chosen a platform already, Netflix is looking inward for growth. According to Greenfield, stopping password sharing may help add between 10 and 20 million new accounts in the US market alone.

For now, Netflix is testing the feature, and there are many things to work through for it to be near perfect. The system is liable to throw up false flags which may annoy users.

Written by HackerVibes

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