Netflix Planning Crackdown On Password Sharing

Netflix is planning to crack down on users who share their passwords with friends and family members who do not live with them. The streaming giant told investors that password sharing is costing the company at least $6.25 billion in annual revenue.

Netflix admitted that allowing people to share passwords helped fuel their growth and viewership numbers, especially during the early days of the coronavirus pandemic.

“Sharing likely helped fuel our growth by getting more people using and enjoying Netflix. And we’ve always tried to make sharing within a member’s household easy, with features like profiles and multiple streams. While these have been very popular, they’ve created confusion about when and how Netflix can be shared with other households,” the company wrote in a letter to shareholders.

Netflix did not provide details about its plans to crack down on people sharing their passwords but said it believes there is an opportunity to turn those people into future customers.

“There’s a broad range of engagement when it comes to sharing households from high to occasional viewing,” the company said. “So while we won’t be able to monetize all of it right now, we believe it’s a large short- to mid-term opportunity.”

Last year, the streaming company started testing out a pilot program in Costa Rica, Peru, and Chile that would allow users to add their friends to their accounts for an additional fee of around $3.