Everything You Need to Know About Netflix Cracking Down on Password Sharing

Nearly a year after Netflix first said that it was going to begin making some subscribers pay an additional fee for sharing their account with users outside their household, the streamer has announced a “broad rollout” of the policy over the next three months.

In the April letter to shareholders it released Tuesday, Netflix said the impending password-sharing crackdown will arrive in the U.S. in the second quarter of 2023. The move comes after the company unveiled a “buy an extra member” option in Canada, New Zealand, Portugal, and Spain in the first quarter of the year.

“In Q1, we launched paid sharing in four countries and are pleased with the results,” Netflix said. “We are planning on a broad rollout, including in the U.S., in Q2.”

Netflix has said it estimates that over 100 million households worldwide are using shared accounts and that cracking down on password sharing would be a “big opportunity” for revenue growth. The planned rollout comes in the wake of a tumultuous year in which the streaming giant lost subscribers for the first time in over a decade, introduced ads to its service for the first time in its 15-year history, and came under fire for several controversies.

“2022 was a tough year, with a bumpy start but a brighter finish,” Netflix said in its January letter to shareholders. “We believe we have a clear path to reaccelerate our revenue growth: continuing to improve all aspects of Netflix, launching paid sharing and building our ads offering. As always, our north stars remain pleasing our members and building even greater profitability over time.”

Here’s what you need to know about Netflix’s password sharing crackdown.

How will Netflix’s password sharing crackdown work?

Currently, Netflix subscribers in the U.S. can use their account on one, two, or four screens at once and prices reflect the number of screens available, ranging from $9.99 to $19.99 per month. This will still be the case once the password sharing crackdown takes effect, with the exception of one big change—all of the streaming devices logged into an account will have to be located in the same household.

Netflix began experimenting with charging for password sharing in Costa Rica, Chile, and Peru in the first half of last year. In those three countries, Netflix has given users who are borrowing someone else’s account the ability to transfer their existing profile information—including viewing history and personalized recommendations—to their own account. It has also allowed subscribers who want to keep sharing with family or friends outside of their household to pay for “sub-accounts” for extra members.

Subscribers in those countries have been able to add up to two extra members to their accounts for an additional $2.99, 2,380 Chilean pesos, and 7.9 Peruvian sol, respectively, each per month.

In the four countries that Netflix launched its “buy an extra member” option in earlier this year, Netflix Standard and Premium plan subscribers can also add up to two sub-accounts for an extra CA$7.99 in Canada, NZ$7.99 in New Zealand, €3.99 in Portugal, and €5.99 in Spain per month per person.

Netflix has not yet announced how much it is planning to charge for this service in the U.S.

“From our experience in Latin America, we expect some cancel reaction in each market when we roll out paid sharing, which impacts near term member growth,” Netflix said in its January letter to shareholders. “But as borrower households begin to activate their own standalone accounts and extra member accounts are added, we expect to see improved overall revenue, which is our goal with all plan and pricing changes.”

How will Netflix stop you from sharing your password?

Going forward, Netflix will ask anyone using an account on a streaming device that isn’t associated with the account owner’s household to enter a four-digit verification code that will be sent to the primary email address or phone number associated with the account. The person using the device will have to enter the code within 15 minutes to gain access. Netflix has said it will use information such as IP addresses, device IDs, and account activity from the devices signed into an account to determine whether or not a device is associated with a household.

For now, the streamer has said it will not automatically charge you if you share your account with someone who doesn’t live with you.

Primary account owners, and those who live with them, should be able to access their account without verification while traveling, according to Netflix. However, if you’re away from your household for an extended period of time, you may occasionally be asked to verify your device.

Earlier this year, The Streamable reported that the crackdown would require users to connect to the Wi-Fi at their primary location, open the Netflix app or website, and watch something at least once every 31 days on any device associated with their account to avoid getting blocked. However, that information, which is still visible on an Internet Archive page, has since been removed from Netflix’s U.S. Help Center.

In an emailed statement to The Verge, Netflix spokesperson Kumiko Hidaka said the streamer has not confirmed those details. “As you may remember, we rolled out Extra Member in Chile, Costa Rica, and Peru back in March. But the U.S. (and other countries) don’t have it,” Hidaka said. “The only thing we’ve confirmed so far is that in our earnings on 19 January that ‘Later in Q1, we expect to start rolling out paid sharing more broadly.'”