Netflix’s US Password-Sharing Crackdown Isn’t Happening—Yet

Spent after Netflix After years of trying different methods to crack down on password sharing, changes on the United States Help Center page this week seemed to indicate the streaming giant had finally settled on a plan. But those tweaks quickly faded away, leaving confusion and concerns about potential changes to Netflix’s account sharing policies. Now the company is clarifying that nothing has changed this week and no new restrictions are being introduced at this time.

“On Tuesday, a Help Center article with information specific to Chile, Costa Rica, and Peru went live in other countries for a short time. We’ve since updated it,” a Netflix spokesman said in a statement.

However, the deathblow for password sharing still rings after the company announced in its recent earnings conference call that it would announce and begin rolling out account sharing changes globally in the first quarter of 2023.

“We have people watching Netflix and not paying us because they’re basically borrowing someone else’s credentials. And our goal this year is to basically overcome that situation and convert a lot of those people to paid accounts or have the account holder pay for them,” said Gregory Peters, Netflix’s chief operating officer and chief product officer, in the latest release the company’s earnings call on January 19th. “So we’ve been working hard on it, trying to do some kind of thoughtful experimentation so our members can talk to us about what solutions work for them. … We’re poised to roll those out later this quarter. We’re going to sway that a bit as we work some sort of group of countries, but we’ll really see that happening over the next few quarters.”

This week’s confusion over possible changes stemmed from content intended for one country’s help page that was mistakenly published for other countries. The situation was also complicated by the fact that the Netflix Help Center pages allow you to quickly switch between information for different countries using a “View current information for” tool that lets you select from a drop-down menu of country names can.

For nearly a year, Netflix has been testing an approach in Chile, Costa Rica, and Peru that sees the company being more serious about tying each account to a physical location, or “household,” and only allowing devices to access the account regularly from that location access . To do this, the company says it uses “IP addresses, device IDs, and account activity” to determine where devices are streaming content from. A key part of the initiative in these three countries is the addition of a paid sharing or “add an extra member” mechanism, similar to the family plans offered by streaming services like Spotify, through which Netflix subscribers can pay a reduced price to grant family access to shared accounts for members or friends with their own login.

Based on comments from Netflix executives on the recent earnings call, it appears similar changes are likely to occur in the U.S. and other markets. But the specifics of what Netflix will launch in each country aren’t clear just yet.

“Netflix is ​​a company that was built out of superfans and was very consumer-centric, so it’s important for them to create flexibility in everything they do for edge cases, and adding restrictions could create friction,” says Jason Kint, CEO of the digital media retail organization Digital Content Next. (WIRED’s parent company, Condé Nast, is a member.) “They don’t want to build critics to criticize their service. But ultimately, these are still business decisions. … Your move will have downstream implications for the decisions of other companies.”

In the January conference call, Netflix executives stressed that they braced for a backlash as they prepare to crack down on password sharing. “I think it’s worth noting that this isn’t going to be a universally popular move,” Peters said. “There will be current members who are unhappy with this move. We’ll see some kind of cancel reaction to that. We think this is similar to what we see when we raise prices.”