How streaming giants are cracking down on password sharing

After years of sharing passwords to cut down on the cost of watching our favourite TV shows and movies at home, streaming giants such as Netflix and Amazon are bringing the curtain down.

“It’s finally coming,” wrote Eric Vilas-Boas on Vulture. “After months and months of buildup, international market testing, and no small amount of subscriber hand wringing, Netflix is at last set to put the squeeze on the crime of hanging onto your ex’s, older sibling’s, or parents’ account credentials for years on end.”

Perhaps it was inevitable that as soon as the likes of Netflix began to feel the pinch the first thing they would do is squeeze more money from the customer. But Netflix “has been threatening a crackdown on password sharing for years”, said the Independent. Now, following its trial run in Latin America, its most recent January newsletter stated it would “expect to roll out paid sharing more broadly” in Q1.

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How are they doing it?

“Millions of people in the UK are estimated to partake” in password sharing, said Yahoo!. But last week Netflix outlined new measures “to ensure that any device which uses the account is associated with the account holder’s primary location”.

This essentially means you can still share passwords within households. “People within your home can still use your account, said Sky News, “so if mum or dad are paying, but the kids are still at home, they can have their own profiles and watch Netflix on their own devices as they do now.”

But if the kids have gone to university or moved out, maintaining access to their parents’ Netflix will get trickier. The company will use the IP address of the internet connection between device and router in order to affirm the logins are all taking place from the same area. However, you can still take your device on holiday and use the same account, provided you regularly connect to your home wifi.

But in what Forbes described as “a strange turn of events”, these rules were then removed from the Netflix website, with the company telling The Streamable that the rules it published were only meant for people in Latin America, where it has rolled out the changes.

While the enforcement of Netflix’s password-sharing crackdown will happen, the spokesperson said that some parts will be staggered. This indicates that “there may be a different way of actually enforcing the end of password sharing in different regions – perhaps via a small charge for additional accounts rather than a full subscription”, said Forbes.

Unsurprisingly, the move did not go down well with Netflix subscribers, with many taking to social media to call out the new rules, highlighting the fact it comes during a cost-of-living crisis for many in the West. “This new Netflix anti-password sharing rule is so stupid. What about students? What about people who travel? I literally pay for one and won’t be able you use my own account after 30 days of leaving home?? Make it make sense,” one person tweeted.

Why are they doing it?

“Password sharing is against the terms of service of virtually every streaming service,” said Insider, and it’s not just Netflix looking to end the practice.

AT&T CEO John Stankey believes its service, HBO Max, has dealt with the issue of password sharing without having to make radical changes. “We were thoughtful about how we built the product and that we gave customers enough flexibility but we don’t want to see rampant abuse,” Stankey said.

Hulu is relatively relaxed about password sharing, though for live TV, customers are expected to regularly login to their home network, a move similar to that being made by Netflix.

Both Apple TV+ and Amazon Prime Video have functionality to enable password sharing. The attitude seems to be regulation rather than prohibition. “Apple TV+ has a Family Sharing feature which allows account holders to share video access with up to six users for free”, said Insider. “The Amazon Household feature, however, restricts access to a max of two ‘adults,’ four ‘teens,’ and four ‘children.’”

But it’s not just password sharing among friends and family that is a problem. “As competition for customers among streaming services heats up, so has the proliferation of online marketplaces where passwords are being sold illegally at bargain-basement prices,” reported Lookout.

And the subsequent losses for the streamers are mounting. “Account sharing and piracy cost streamers and pay TV providers $9.1 billion in lost revenue in 2019,” said the site. “That’s expected to grow to $12.5 billion in lost revenue by 2024, according to market research and consulting firm Parks Associates.”