Netflix Gives Providers a Heads Up On Password Crackdown

Netflix’s controversial password-sharing crackdown is set to start in June. The move means people can no longer share the password to their accounts with family or friends. The company expects to receive a lot of angry backlash over it. They’re so certain of this outcome that they’ve given telecom and broadband providers a heads-up.

Netflix told their partners they should expect a host of angry calls. There would also be a deluge of support questions once they stop password sharing.

The popular streaming service discussed the situation with top broadband companies. These included UK providers like Sky, TalkTalk, and Virgin Media. They also held talks with various media entities. Most of these firms include Netflix in their bundled TV content.

The discussions aimed to alert companies on what to expect. Especially when Netflix starts enforcing these regulations.

It was also done to help Netflix’s partners prepare for the deluge of complaints. Many unhappy customers have already been vocal about their dissatisfaction. They’re livid over Netflix’s plans to stop the sharing of passwords.

Sources say Netflix will start tightening the screws on password sharing in June. The SVOD company decided on this strategy in a bid to boost its revenue. Netflix has been dealing with slow subscriber growth for a while now.

Reports pegged that over 100 million households worldwide shared accounts with other users. These same households are liable to complain as they’re used to sharing passwords.

It was also reported that the discussions were Netflix’s way to keep partners up to date on its plans. The crackdown on passwords has been progressing for months now.

Details have been scant on the ground. But insiders have hinted that Netflix users will have to set a primary location. This location should be where they often stream shows. Netflix will reportedly use Wi-Fi addresses to keep track of accounts. This will also tell them if the account is then accessed at different locations.

Account holders can still share their accounts with anyone within their household. But they will become notified if the account’s used outside the primary location. There will also be more charges levied on the user. These charges will be for every location the account was then used. For example, you’ll pay more if your child accesses your account when they’re in university.

Netflix will reportedly charge an extra C$7.99 per month per new location. It will cost NZ$7.99 in New Zealand. Account holders in Portugal will have to pay an extra €3.99 while those in Spain will add €5.99.

Netflix account holders will also need to ask for a temporary code when traveling. They will use the code to sign in at a different location. They can then access their account for one week.

The crackdown on password sharing was even expanded to cover its primary markets. This was in the first three months of 2023.

Digital I director Matt Ross predicts subscribers will have “a bit of a kneejerk reaction.” The research company head mentioned they saw a drop in viewing use per account in Spain. It’s one country where Netflix started its crackdown on password sharing. He said the company should consider the crackdown’s impact on subscriber numbers. Especially for the next few years.

Netflix did a trial run of the new password policy in 2022. The company tested it in a few South American markets first. It then rolled it out in Canada, New Zealand, Portugal, and Spain. The company had mixed results in these areas.

Many users reportedly canceled their subscriptions due to the changes. For instance, Netflix lost a million subscribers in Spain. It was worrying enough that the streaming giant delayed the policy’s wider implementation.

It was a different story in Canada though. Netflix said in April that it had the right approach. The company noted that the number of paying users went up before the policy’s launch. This has convinced Netflix’s leaders to push through with their plans.

One analyst said there wasn’t a lot of consternation among Canadian subscribers. This was what they observed in the markets where Netflix already rolled out its new policy.

Experts also noted that Netflix had a lot of time to test the waters before they did this. Their “paid sharing” pricing isn’t too steep an upgrade. It’s not a big hardship to add more people to their original accounts. It’s why there aren’t a lot of furious people harping about not being able to use Netflix for free.

There are concerns it might not be the best time to crack down on password sharing though. The UK does have a cost of living crisis on its hands. That’s something that account holders in Canada doesn’t have to deal with.

Netflix does have a plan for that. The company responded to this crisis by introducing a new pricing tier. Account holders can opt to get a plan of £4.99 a month. This will include advertising, something that will become done in the UK for the first time.

Netflix and its media partners have been quiet about the rollout. Service providers like BT and Sky have declined to comment on the issue. Virgin Media and TalkTalk are also noncommittal so far.

Some sectors have expressed worries about the Netflix crackdown. It might cause other platforms to follow their lead. This will make video on demand more expensive for millions. It’s not a small thing. Especially since many are already angry about their favorite shows getting canceled.