Netflix has officially begun its plan to make users pay extra for password sharing

May 24th, 2023

The Netflix logo is displayed on the company's website on Feb. 2, 2023, in New York. Netflix on Tuesday, May 23, 2023, outlined how it intends to crack down on the rampant sharing of account passwords in the U.S., its latest bid to reel in more subscribers to its video streaming service amid a slowdown in growth. (Richard Drew/AP)
Richard Drew / Richard Drew

Netflix is rolling out its crackdown on password sharing, more than a year after the pivot was first announced.

The streaming company is limiting password sharing to people living in the same household. Account holders can add more people outside of the household for an extra $7.99 a month, or they can use the “transfer profile” feature to prompt extra users to make their own accounts that they pay for, Netflix said Tuesday.

Netflix said out-of-household users should have begun receiving emails about the change Tuesday.

Those living in one household should still be able to access the account when traveling or on the go, Netflix said.

In March of 2022, the company said that while it had encouraged account sharing in the past, with features such as profiles and multiple streams, the practices have been “impacting our ability to invest in great new TV and films for our members.”

Much like back then, consumers are not happy about the switch.

“Between Netflix cracking down on password sharing and Max locking you out of your HBO Max account, what an incredible day for the limitless possibilities of streaming!” one user tweeted.

“I’ve been a @netflix member since probably 2010,” another person said. “I never canceled it, even with the price hikes. But I think this password-sharing crackdown plan is the last straw. Not even with your family members? What was the point of profiles then?”

“Time to cancel netflix! nobody is paying you more to share a password bestie,” a user said.

According to the company, more than 100 million households participate in password sharing. It had 232.5 million subscribers as of April.

Netflix previously tested out paid password sharing in international markets such as Chile, Costa and Peru in 2022. Earlier this year, the company expanded its paid account sharing into Canada, New Zealand, Portugal, Chile and Spain. The company said it had positive results in a letter to shareholders at the end of the first quarter of this year.

“As with Latin America, we see a cancel reaction in each market when we announce the news, which impacts near-term member growth,” it said. But as borrowers start to activate their own accounts and existing members add ‘extra member’ accounts, we see increased acquisition and revenue.”

In the first quarter of 2023, Netflix brought in about $8.2 billion in revenue, compared to about $7.9 billion at the end of the first quarter of 2022, according to the letter to shareholders.