In some Latin American nations, Netflix has been testing $3 supplemental fees for password sharing. Now, UK Netflix customers could face criminal charges for sharing their passwords.
Customers of Netflix in the UK may soon be charged with a crime if they share their password in 2019.
The well-known streaming service intends to ban password sharing starting in the first quarter of 2023.
It has been on Netflix’s radar to take action against it for a while, but this is the first official announcement that the adjustments will actually take place.
Out of the 222 million households with active memberships worldwide, the business asserted that at least “100 million additional households” were accessing its services through password sharing.
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More than 30 million households in the US and Canada are said to utilize Netflix via password sharing, according to Newsweek.
Only those who share a residence may apply for Netflix’s shared accounts with distinct profiles and multiple streams.
The online media platform has been losing money owing to unlawful password sharing for years, but due to an increase in subscribers during the previous two years, it was willing to overlook the issue.
However, because it is seeing its first decline in subscribers in ten years, income has been declining since the beginning of this year.
In order to combat a loss in subscribers, the corporation has implemented penalties for individuals sharing accounts who do not reside in the same house.
According to the firm, subscription sharing has also made it more challenging for the company to grow its service and productions into other areas.
Multi-household sharing is not permitted by Netflix’s terms of service, which state that any action carried out through an account is the responsibility of “the member who created the Netflix account and whose payment method is charged.”
“To maintain control over the account and to prevent anyone from accessing the account, the account owner should maintain control over the Netflix ready devices … and not reveal the password or details of the payment method associated with the account to anyone,” according to the terms.
“We can terminate your account or place your account on hold in order to protect you, Netflix or our partners from identity theft or other fraudulent activity.”
It explored introducing pay-per-view content to deter account holders from disclosing their passwords, however company executives opted against it.
Netflix Executives Enforce Sharing Rules Due to Revenue Shortfall
The co-CEO of Netflix, Reed Hastings, determined that it was finally time to address the password-sharing issue after it had been put off for far too long.
Ted Sarandos, his co-CEO, concurred and promised that the streaming service would finally take action.
In general, viewers are against price increases, and according to Sarandos, the corporation must find a solution to the sharing problem if it wants people to “see the value” in it.
“There are folks who are enjoying Netflix, literally for free today,” said Sarandos.
“So, they’re getting a lot of value out of it. I think they’ll be happy to have their own account.”
In order to avoid alienating customers, Netflix will start phasing out password sharing over time rather than all at once, and will start charging individuals who share accounts with people outside of their home in 2023.
Users Will Be Tracked to Enforce Restrictions on Non-Subscribing Users
Under the new regulations, those who keep sharing an account outside of the primary subscriber’s immediate family will be subject to additional charges.
In order to increase revenue, Netflix indicated it would charge non-household users a little less than its $6.99 ad-supported plan, and it wants people who are using password sharing services illegally to sign up for their own subscriptions.
The streaming service also anticipates launching additional ad-supported subscription packages in the future.
For instance, Netflix’s current premium plan permits simultaneous viewing on four supported devices, such as iPhones, iPads, and Macs, as long as those devices are owned by members of the same household, but it does not permit simultaneous viewing by multiple viewers outside of that household. Ultra HD 4K streaming is also supported under this plan.
According to The Dallas Morning News, the firm will look into tracking specific data, such as Device IDs, IP addresses, and account activity, to assist determine whether viewers are a part of the same household and enforce the new regulations.
In some Latin American nations, the online video firm had been testing $3 supplemental fees for password sharing.
Netflix has previously been sued by shareholders who suffered significant losses and damages for lying about the company’s growth and its failure to retain subscribers.
According to reports, the trial program constantly requests a verification number from primary account holders before allowing anyone from outside their household to use their account unless a monthly charge is made to add non-household members.
Users in North America may be subjected to a similar procedure in the upcoming year.