Netflix has revealed new details on its password sharing clampdown.
The streaming platform announced in 2022 that it had plans to crack down on password sharing by charging accounts with a small fee when they are used outside the household, as reported by the Deseret News.
On Wednesday, new details emerged about the password sharing fee. Updates to the Netflix FAQ website shed light on the streaming giant’s plans for exchanging passwords.
“People who do not live in your household will need to use their own account to watch Netflix. When a device outside of your household signs in to an account or is used persistently, we may ask you to verify that device before it can be used to watch Netflix or switch your Netflix household.”
Details on a password sharing fee are still unclear. The platform reported that “Netflix will not automatically charge you if you share your account with someone who doesn’t live with you.”
According to CNBC, in Peru, Costa Rica, and Chile, Netflix charged account holders $3 per month for every “sub account,” for users who live outside the primary household.
How will Netflix determine your primary household?
According Yahoo Finance, Netflix will ask users to provide a “primary location” for all accounts within the same household. Netflix will use IP addresses, device ID and device activity to determine if the device is within its “primary location.”
If an account is consistently accessed outside of the “primary location” it will likely be blocked.
To access an account on a device outside of the “primary location,” the account holder will receive an email with a four-digit code, which they will have 15 minutes to enter before it expires, per CNBC.
Why is Netflix cracking down on password sharing?
The streaming giant is losing money and users due to password sharing.
Netflix reported that 100 million households access the streaming platform with a shared password, per CNBC. During the first quarter of 2022, Netflix lost 200,000 U.S. subscribers, marking the first time the company has lost viewers in a decade, per NPR.
“We’ve always tried to make sharing within a member’s household easy, with features like profiles and multiple streams,” Netflix said in its statement, per NPR. “While these have been very popular, they’ve created confusion about when and how Netflix can be shared with other households.”
According to Fortune, Netflix loses $6.25 billion in annual income because of password sharing.