Netflix Password Sharing Crackdown: What Will It Cost You?

After threatening to limit the popular practice of password sharing for months, Netflix has outlined a plan to make it happen, starting in 2023.

Courtesy Netflix
(Image credit: Courtesy Netflix)

 If you’ve been streaming Netflix on a borrowed password, you’ve been relying on the generosity of others – and, well, Netflix.The practice has long been a thorn in the streaming giant’s side, with a real impact on its bottom line. While you may have been too busy watching Monster: The Jeffrey Dahmer Story to notice, Netflix stock has had a miserable year in the face of a slumping market and strong competition from Disney, Apple, and other streamers.

In fact, it was in its most recent earnings announcement that Netflix indicated it’s going to bring the hammer down on password sharing in 2023. But, how? “After listening to consumer feedback,” Netflix said in a letter to shareholders, “we are going to offer the ability for borrowers to transfer their Netflix profile into their own account, and for sharers to manage their devices more easily and to create sub-accounts (“extra member”), if they want to pay for family or friends.” Note that Netflix’s use of “family” here means people outside a household – you’ll still have the ability to use “features like profiles and multiple streams.” As for cost, nothing firm yet from Netflix. But analysts have pointed to market experimentation the company has done in its South American market (remember, Netflix is global), where a program to create a subaccount was priced at $2.99 per user in Costa Rica (a country that uses the U.S. dollar as its currency).

Exactly how this password limiting will work could be complicated as well, since members of a single, paying household could be far-flung when they travel. As for when to expect these changes? “Early 2023,” according to Netflix’s letter. Password sharing has always been popular with Netflix users. The service estimates that there are an additional 100 million additional households using the service above the 222 million paid accounts – and it acknowledges that the phenomenon has had its benefits even as it eroded revenues. “Sharing likely helped fuel our growth by getting more people using and enjoying Netflix,” the company said. And the firm is taking some steps to keep even its freeloading users happy and streaming.

A pre-emptive move is “profile transfer” – aimed at keeping a password-sharer’s settings (personalized recommendations, viewing history, games) — when they start their own paid membership, as outlined in a corporate blog post (opens in new tab).  

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David Muhlbaum
Senior Online Editor, Kiplinger.com

In his current role as Senior Online Editor, David edits and writes a wide range of content for Kiplinger.com. With more than 20 years of experience with Kiplinger, he has worked on and written for a range of its publications, including The Kiplinger Letter and Kiplinger’s Personal Finance magazine. He is a co-host of Your Money's Worth, Kiplinger's podcast and has helped develop the Economic Forecasts feature.