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Netflix's Password-Sharing Crackdown Will Start Any Day: What to Know

Sometime between now and April Fools' Day, Netflix will begin rolling out fees for sharing an account beyond a single household. (No joke.)

An iPhone shows an illustration of the Netflix logo with a padlock shackle and keyhole
Netflix began testing account-sharing charges in Latin America after its global membership declined for the first time in a decade.
Joan E. Solsman/CNET

The end of free Netflix password sharing is near: Within about the next two months, the streaming service will begin rolling out a system charging fees for "extra member" subaccounts when people outside one household use the same membership.  

After years of being relatively lax about password sharing, last year Netflix started testing ways to "monetize account sharing" after recording its deepest subscriber losses in a decade. In addition to the password-sharing fees, Netflix has also launched cheaper subscriptions supported by advertising, hoping to entice more people to pay for Netfix if they don't have to pay quite as much. 

Netflix's dominance of streaming video -- not to mention years of unflagging subscriber growth -- pushed nearly all of Hollywood's major media companies to pour billions of dollars into their own streaming operations. These so-called streaming wars brought about a wave of new services, including Disney PlusHBO MaxPeacockParamount Plus and Apple TV Plus. This flood of streaming options has complicated how many services you must use (and, often, pay for) to watch your favorite shows and movies online. 

Now, under pressure from the intensifying competition, Netflix is pursuing strategies it had dismissed for years, including an account-sharing crackdown. 

How much will 'paid account sharing' cost? 

The company hasn't specified prices for these new charges yet. But the fee system has already been implemented in Chile, Costa Rica and Peru as a test. In these countries, the fee works out to be roughly equivalent to one-quarter the price of a Standard plan, on average. 

If Netflix sticks to that practice, then each extra member subaccount in the US would cost between about $3.50 and $4 per month -- but a fairly wide range was tested. If the US fees track with Chile's, for example, subaccounts would cost as much as $4.43 a month.

(By comparison, Netflix's cheapest tier in the US -- Basic With Ads -- is $7 a month.)

Who has to pay the password-sharing fee? 

If Netflix sticks to the rules written for the Latin American tests, extra members will have their own account and password -- but their extra member "slot" will be paid for by the account owner who invited them to join the Netflix membership.

Since the model creates separate log-in credentials, it isn't really password sharing anymore. (It may be why Netflix uses the term "paid account sharing.") But the main account holder will be the person paying for both the regular subscription and the new subaccount fee, if Netflix sticks to the policies set down for the test countries. 

When will Netflix start its crackdown? 

Netflix said last month that it'll start launching the account-sharing structure more widely before the end of March. It added that a full, global rollout will take a couple of quarters. 

The company also said the rollout would be progressive across its markets: Netflix won't starting charging everyone globally at the same time like flipping a switch. Instead, the new setup will start in a selection of places and widen from there. 

Netflix hasn't specified which countries will be first, nor has it explained exactly how long the new fees will take to fully launch worldwide. 

"We're ready to roll those out later this quarter. We'll stagger that a bit as we work through sets of countries," Netflix co-CEO Greg Peters said last month, referring to the first quarter of 2023. "But we'll really see that happen over the next couple of quarters."

How will Netflix enforce it? Will it block my account if I share?

Netflix hasn't detailed how it'll enforce paid account sharing once the fees roll out widely. Its enforcement varied during the tests in Latin America, according to one report. 

But Netflix help-center pages for Costa Rica, Peru and Chile outline a system that may reflect the company's plans for the wider rollout of paid sharing. 

This system hinges on your account's "primary location" and the devices that connect to the Wi-Fi network there. Netflix help-center pages say that you set your primary location automatically when you log in to Netflix on a TV set connected to a Wi-Fi network. You can also manage your primary location in settings. If devices connect to Netflix on this primary location's Wi-Fi, they're considered "trusted devices" for 31 days. So long as devices connect to Netflix on that network at least once every 31 days, they aren't likely to encounter any blocks.

However, Netflix indicates it may block specific devices that appear to be involved in password-sharing without paying. Help-center pages for the test countries note that "when someone signs into your account from a device that is not part of your primary location, or if your account is accessed persistently from another location, that device may be blocked from watching Netflix."

If a device were to get blocked, you'd have a few options. If you were just traveling, you could request a temporary code that would unblock that device for seven days. If your primary location had changed, you could also update it manually in settings -- presumably, that means the blocked device could connect to that primary location's Wi-Fi network and become a trusted device again for 31 days. Or (drumroll) you could sign up an extra-member subaccount. 

There's no guarantee this scheme will be the one Netflix rolls out widely as it expands paid sharing beyond Chile, Costa Rica and Peru. And how strictly Netflix enforces these rules is an open question. 

Previously, before paid sharing became a big initiative, Netflix help-center pages outlined a slightly different procedure. Netflix's terms have always been that an account is supposed to be used in one household. It just was fairly lax on enforcement. (Netflix even tweeted "love is sharing a password" once.) But Netflix previously characterized a system that detects an account household by looking at IP addresses, device IDs and account activity from devices logged in to the same account. If your account was accessed persistently from a location outside your household, or if someone signed in to your account from a device that wasn't associated with the household, Netflix said, it might ask the primary account owner to verify. Netflix would do this by sending a link to a four-digit verification code to the email address or phone number associated with the main account. The code would have to be entered into the device within 15 minutes or you'd need to request another one. 

Whether this code-verification system will be part of the crackdown, or whether the Latin American procedures become the norm, remains to be seen. 

Did Netflix accidentally leak information and then pull it down?

Sort of. 

Netflix has a "help center" customer service site. Because Netflix's prices, tiers and policies can vary between countries, help-center pages can toggle between different countries to show what's applicable in each particular market. Since Netflix has been testing account-sharing fees in Chile, Costa Rica and Peru for months, you can go to, say, Chilean help-center pages to see how Netflix is characterizing its rules for account sharing there. 

Sometime recently, Netflix added new information to help-center pages about account sharing, and those new details are still up on pages for Chile, Costa Rica and Peru. (In fact, most of the explanation in the previous section is based on those help-center pages). But Netflix also posted similar information on help-center pages for other countries too, ones that haven't launched the initiative yet. When Netflix realized those pages for other countries were live in error, it pulled them down. 

So, yes, Netflix did pull down some info in some places, but the company also left it up in other places. 

Can I share a low-price Basic account with extra members? 

Not likely. If Netflix keeps to the norms of the account-sharing tests in Latin America, the company would make these "extra member" fees available only on its Standard ($15.50 a month in the US) and Premium ($20 a month in the US) plans, which both allow more than one simultaneous stream. 

In the tests, Netflix hasn't offered an option for these "extra member" fees on its Basic plans, which now are available in some countries as two options: a pricier Basic account that's ad-free and a cheaper Basic With Ads. In the US, the ad-free Basic tier is $10 per month and the ad-supported level is $7 a month. 

Both these Basic plans limit your viewing to a single simultaneous stream, which makes account-sharing functionally difficult.

Will I lose all my recommendations if I get kicked off someone else's account or have to open a subaccount? 

Netflix has created a profile-transfer feature, which it launched the day before revealing its plans for a wider rollout of the account-sharing fees. Profile transfer has been a key component of the password-sharing fees tested in Chile, Costa Rica and Peru. This feature lets the watch history and recommendations of a profile created on a shared Netflix account be transferred to a new, independent account. This new account can then be added to somebody else's Standard or Premium subscription plan as an extra member account (for a fee), or it can be used when signing up for a separate membership (which, of course, also requires payment). 

How did Netflix come up with these fees? 

As noted above, the password-sharing fee system that Netflix will roll out appears to be modeled on a scheme the company has been testing in Chile, Costa Rica and Peru since March. 

Netflix tested a different concept elsewhere in Latin America. In July, the company said it was trying out a method in Argentina, the Dominican Republic, El Salvador, Guatemala and Honduras that established an account's primary residence as the "home" for the membership. If the service detected streaming at any additional households for more than two weeks, it would prompt the account holder to set up -- and pay for -- additional "homes," with a limit on how many additional homes you can add, depending on how much you're already paying for Netflix. 

But Netflix appears to be dropping this "additional homes" model in favor of the other one it tested in Chile, Costa Rica and Peru. 

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