Netflix begins its password sharing crackdown — how it will affect you

Netflix has a plan to deal with rampant account sharing: a program that lets subscribers pay extra to share their account with people outside their household. In a bid to do so, the streaming giant has introduced paid sharing in Canada, New Zealand, Portugal and Spain on Wednesday.

Netflix had been testing the rules in some countries in Latin America and now, it is expanding its efforts ahead of a broader rollout in “the coming months.” While Netflix won’t say when paid sharing will come to other countries, some version of the plan is expected to be introduced in the U.S. in the next few weeks, as per an AP report.

As per Netflix's paid password-sharing plan, extra members on an account who are outside the account owner's household will have to pay for their own account and password to join the Netflix existing membership. The model creates separate login credentials for such members, putting an end to password sharing.

Users will no longer be allowed to share their login information outside their homes. The company that once tweeted “Love is sharing a password” five years ago has now specified that if people outside a user’s home network want Netflix, they’ll have to pay for a new account.

For now, the company said there are no “automatic charges” if someone logs in outside the home network, but a new Profile Transfer feature which was tested out last year could be employed again.

Users may need to verify their devices and log in using only their home network, from time to time with a four-digit code sent to the account owner’s email with a 15-minute expiration window. As per the rules in Chile, Costa Rica, and Peru, users have to renew their credentials every 31 days.

Watching Netflix while travelling may become cumbersome as the new guidelines in Chile, Costa Rica, and Peru state that the company will block devices if an “account is accessed persistently from another location.” However, users can unblock it by requesting a temporary code when travelling for seven consecutive days or by adding a new user to the account.

The company has stated that it will “use information such as IP addresses, device IDs, and account activity from devices signed into the Netflix account” to sniff out the offenders. With the added scrutiny on IP addresses and how they interface with accounts, users who use VPNs to stream content from different countries will also face difficulties.

On January 31, the company published what it described as an erroneous update to support pages worldwide indicating that the crackdown on password sharing has been rolled out globally.

It faced massive pushback after the notes on when and how it might block devices used beyond a single household appeared on support pages for the US and other countries where the new “paid sharing” setup hadn’t rolled out yet.

Later, Netflix’s communications director, Kumiko Hidaka, clarified that the information on support pages was mistakenly published and it only stands for the three Latin American countries, Chile, Costa Rica, and Peru where the system went live.

Now, on February 8, the same password-sharing rules were rolled out to Canada, New Zealand, Portugal, and Spain, marking the first expansion of the “paid sharing” plan.

The company blog post announced the changes with instructions for managing account access and devices, transferring profiles, and buying access for an additional user.

The US and other markets are yet to face the changes as the “paid sharing” plan is expected to roll out more broadly in the next quarter (Q1), as per a Vulture report.

In the three Latin American countries where the paid password-sharing plan was rolled out, users who borrowed someone else’s account were given the ability to transfer their existing profile information, including viewing history and personalised recommendations to their own newly created account.

Netflix further allowed subscribers who want to keep sharing with family or friends outside of their household to pay for ‘sub-accounts’. Netflix will also charge users who want to use the service across multiple locations.