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Netflix starts cracking down on password sharing

The service is telling some viewers that their freeloading days are coming to an end.

The service is telling some viewers that their freeloading days are coming to an end.

(Image courtesy Chante Most via Twitter)

The days of “borrowing” your mom’s Netflix password may soon be coming to an end.

For years, Netflix has turned a blind eye to the trend of password sharing in which one person pays for a Netflix subscription that is enjoyed by several others. Just five years ago, Netflix’s chief executive Reed Hastings said the practice was “a positive thing” for the company.

Now the company has had an apparent change of heart: This week, some freeloading Netflix users began receiving messages on their TV sets encouraging them to sign up for their own accounts. The messages seem to appear when a person who is not living with the primary account holder tries to access Netflix’s library of movies and TV shows.

“If you don’t live with the account holder, you need your own account to keep watching,” the message says along with options to verify an account or sign up for a one-month free trial.

In a statement, a Netflix spokesperson confirmed the company is running a test with a limited number of subscribers that is “designed to help ensure that people using Netflix accounts are authorized to do so.”

How Netflix is performing this test is unclear, but the company said the messages are only appearing on TV sets for now — freeloaders who are using another person’s Netflix credentials on mobile phones, tablets or computers remain unaffected, at least for now.

Netflix’s about-face on password sharing wasn’t entirely unexpected: As far back as October of 2019, some Netflix executives said they may eventually start to crack down on the practice as its business needs evolved over time.

“We continue to monitor it,” Greg Peters, the chief product executive, said during a quarterly earnings call, adding that the company would “explore consumer-friendly ways” to abate the practice.

Around the time of his comments, a consumer research company estimated that around 14 million Netflix viewers did not have an active subscription to the service, which cost the company over $130 million in lost subscription revenue. That was three years ago, and presumably the problem has only grown since then, especially as Netflix has grown keen on raising its base subscription price nearly every year.

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About the Author:

Matthew Keys

Matthew Keys is the publisher of The Desk and reports on the business and policy matters involving the broadcast television, streaming video and radio industries. He previously worked for Thomson Reuters, Disney-ABC, Tribune Broadcasting and McNaughton Newspapers. Matthew is based in Northern California, has won numerous awards in the field of journalism, and is a member of IRE (Investigative Reporters and Editors).