Netflix to Expand Password Crackdown to U.S. in Q2 With Paid-Sharing Plans

Netflix said it would stage a “broad rollout” of its paid-sharing plan in the second quarter of 2023, including in the U.S.

The streamer announced the news as part of its first quarter 2023 earnings report. As part of Netflix’s crackdown on customers sharing passwords with people outside their household, the company plans to start blocking devices (after a certain period of time) that attempt to access a Netflix account without properly paying.

“In Q1, we launched paid sharing in four countries and are pleased with the results,” Netflix said in its Q1 letter to shareholders. “We are planning on a broad rollout, including in the U.S., in Q2.”

The four markets it is referring to are Canada, New Zealand, Portugal and Spain, where in February Netflix launched a “buy an extra member” option that lets primary account holders pay an additional monthly fee for a sub-account for 1-2 people they don’t live with. That came after Netflix last year launched paid-sharing tests in three Latin American countries (Chile, Costa Rica and Peru).

“A Netflix account is meant to be shared in one household (people who live in the same location with the account owner),” the company says on the customer-help section of its site. “People who are not in your household will need to sign up for their own account to watch Netflix.” However, Netflix members can continue to access the service while traveling via their personal devices or by logging in to new TV (like at a hotel or vacation rental).

One year ago, Netflix estimated that passwords are being shared in violation of its rules with more than 100 million non-paying households worldwide. That’s when the company told investors it was focusing on generating revenue from password-sharing users.

Netflix has said it expected the move to convert password-piggybackers into paying members would produce an elevated volume of cancelations, leading to a hit on near-term subscriber growth. “This will not be a universally popular move,” Netflix co-CEO Greg Peters said on the Q4 2022 earnings interview, likening it to an uptick in churn when the company has raised prices on its streaming plans.

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