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Netflix inches closer to kicking you off your parents’ account

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Netflix headquarters in Hollywood on Sunset Boulevard.
(FG / Bauer-Griffin / GC Images)
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Still haven’t gotten around to finishing that season of “Stranger Things” you were watching on your ex’s cousin’s roommate’s old Netflix account?

You‘d better hurry up: Changes are coming to the streaming platform’s password-sharing policies — and Americans could be the next ones to get locked out.

“Today, over 100 million households are sharing accounts — impacting our ability to invest in great new TV and films,” the Los Gatos-based tech and entertainment company said in a press release Wednesday. “Over the last year, we’ve been exploring different approaches to address this issue in Latin America, and we’re now ready to roll them out more broadly in the coming months, starting today in Canada, New Zealand, Portugal and Spain.”

Password piracy and account sharing is expected to cost streamers and pay TV providers $12.5 billion in 2024, according to Parks Associates.

April 14, 2022

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The crackdown outlined in Netflix’s announcement involves having account owners set a primary location for their household, then paying the equivalent of four to seven U.S. dollars a month, per profile, to add up to two more users who don’t live there.

“A Netflix account is intended for one household,” the press release states — a markedly different framing of the service than the one many subscribers know and love.

A spokesperson for the company declined to elaborate on if or when the policy changes announced Wednesday will make landfall in the United States, only reemphasizing the line about a wider rollout being imminent.

The news shouldn’t come as a surprise to anyone who’s been following the company’s ongoing war against password sharers. Netflix said in a January shareholder letter that the firm expected “to start rolling out paid sharing more broadly” at some point in the current financial quarter.

Password sharing is a widespread issue for Netflix and its competitors in the streaming space, to such an extent that marketplaces have sprouted up to help people find and buy account passwords on the cheap.

The losses add up — one estimate put the revenue lost to account sharing at $25 billion a year, a quarter of which is coming out of Netflix’s pockets. Amid slowed subscriber growth and a downturn across the tech sector, pressure is building on the company to adjust.

Analysts say that although password sharing is tolerated to a point as a customer-acquisition strategy, it eventually starts to limit growth.

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“We see a tipping point that is starting to have such an impact on subscriber growth, that it’s forcing the streamers to start taking action,” Ken Gerstein, vice president of sales at the antipiracy advice company NAGRA, told The Times last April.

In early 2022, Netflix said it was testing features in Chile, Costa Rica and Peru that would let accounts pay a little extra to share access with up to two people outside their primary household — essentially the same policy that’s now being implemented in Canada and the other three countries.

Change appeared to be imminent last week when information about the password policy being tested in Latin America became visible in additional countries, prompting reports that the policy was getting rolled out more widely.

“For a brief time ... a help center article containing information that is only applicable to Chile, Costa Rica, and Peru, went live in other countries,” a company spokesperson said at the time. “We have since updated it.”

Now, however, the company’s march against password sharers is continuing onward, including in America’s neighbor to the north.

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