Netflix expands its crackdown on sharing

Netflix has expanded its crackdown on users sharing passwords with people beyond their immediate family as it seeks to shore up revenue at the leading streaming television service.

“A Netflix account is for use by one household,” the company said in a statement.

Netflix early this year said more than 100 million households were sharing accounts, “impacting our ability to invest in great new TV and films”.

Netflix has experimented in a few markets with “borrower” or “shared” accounts, in which subscribers can add extra users for a higher price or transfer viewing profiles to separate accounts. In its latest announcement, Netflix said it was expanding the policy to more than 100 countries.

As growth at Netflix cooled last year, the Silicon Valley-based streaming giant set out to nudge people watching for free with shared passwords to begin paying for the service without alienating subscribers.

“This account sharing initiative helps us have a larger base of potential paying members and grow Netflix long term,” co-chief executive Ted Sarandos said on an earnings call.

The company told financial analysts recently that it had delayed a broad crackdown on password sharing “to improve the experience for members”.

Netflix said it made sure its subscribers had seamless access to the service away from home or on various devices such as tablets, televisions or smartphones.

“They are just trying to reduce theft of their service,” independent tech analyst Rob Enderle of Enderle Group said.

Enderle reasoned that Netflix likely paid royalties when subscribers watched some shows or films on the platform, so non-paying viewers could add to the service’s expenses while not making any contribution to revenue.

“In theory, Netflix loses money because they are paying royalties and people are getting the shows for free,” he said.

“It makes no sense for Netflix to allow that to continue.”