Password sharing isn't dead (yet)

... if you're not using Netflix, that is

Well, that was fast. Last week, we learned that the Netflix ad-supported tier will come in at $6.99 per month. Since we know you’re wondering, that’s a 30% price cut compared to the Standard plan ($9.99/month). Will it be worth it? Well, that depends. How much do you hate ads? In this issue:

  • Netflix is (still) trying to squash password sharing

  • Amazon Prime kind of allows simultaneous streams

  • How are streaming defining “households”, anyway?

Netflix is probably done with password-sharing

Once upon a time, Netflix passwords were a communal thing, and the streaming giant was ok with that.

"We love people sharing Netflix," CEO Reed Hastings said in 2016. "That's a positive thing, not a negative thing."

For a while, Netflix rode the high tide of fast customer growth at a time when ignoring password sharing was convenient.

But six years later, that free-wheeling attitude is no more.

Netflix now says password-sharing is cutting into its bottom line. And that means fees are coming — probably. Eventually.

Will sharing actually cost more? And when?

Earlier this year, Netflix rolled out $2-3 fees for users to add “additional homes” in countries like Peru, Chile, and Costa Rica. But the fees were confusing for users and, apparently, for customer service representatives charged with enforcement.

It’s now unclear whether Netflix will charge US users to share passwords with people they don’t live with. The landing page for Netflix Homes just states that the feature is unavailable in the US.

But Netflix does already scale monthly pricing for the number of screens you can watch on at once. To watch on four screens at once costs almost double the basic package.

You can still share away on competitors like Disney+

Netflix’s competitors are not nearly as restrictive on simultaneous streams. They charge less money to get more concurrent streams per account and aren’t scared by people sharing passwords outside of their immediate households. Here’s how other streamers handle sharing:

Hulu on-demand is somewhat restrictive.

  • Simultaneous streams: 2

  • Household limits: none

  • Note: Hulu + Live TV does have household restrictions, but you can buy an Unlimited Screens add-on for unlimited simultaneous streams and up to three streams outside of your home network.

Disney+ is the most generous.

  • Simultaneous streams: 4

  • Household limits: none

Amazon Prime Video is finicky.

  • Simultaneous streams: 3 (sort of)

  • Household limits: none

  • Note: Amazon specifies that users can’t watch the same content on all 3 devices at the same time. So two people can watch Amazon’s Thursday Night Football, but the third screen will have to resort to watching something else.

How do streamers know what a household is, anyway?

When we say “simultaneous stream” we mean the number of devices a subscriber can stream on at once. Think, your kid is watching Cocomelon downstairs while you watch Blonde upstairs.

That’s not really the same as password-sharing, which usually looks like watching a show from your cousin’s ex-boyfriend’s Netflix account.

The key difference here is that your kid is in your household, so your subscription should cover them. Not so for the cousin’s ex-boyfriend, who isn’t responsible for paying your other bills and therefore probably shouldn’t be paying for your Netflix activity.

But how do streaming companies know the difference? Honestly, we don’t really know.

Netflix admits to using IP address to determine users’ geographical locations, but some users have reported GPS location tracking by Netflix on Android phones.

Hulu+ Live TV, however, uses internet connection to determine location and set channel availability.

Most streaming services probably aren’t tracking your actual physical location, which makes household limits so hard to enforce. But they could start at some point in the future if they can get past rising privacy concerns.

Keep an eye on Netflix 

Ultimately, password sharing means many viewers who could be paying for their own accounts are not. There’s a cost to that in terms of lost potential revenue — millions of dollars each year for Netflix.

For most of its history as an on-demand streaming service, that was an acceptable loss.

Now, however, Netflix is trying to soak up every dollar that it can from its existing customers. That includes turning its blind eye to password sharing into the all-seeing Eye of Sauron — or trying to, at least.

For competitors who want to steal Netflix’s market share, though — well, as they say in New Orleans, laissez les bons temps rouler.

The Watchlist

The highly regarded Peacock series One of Us Is Lying returns for Season 2.

Virtual reality escapism goes wild in Amazon Prime Video’s new show, Peripheral.

Dive back into Star Wars on Disney+ on Oct. 26 with the Tales of the Jedi premiere.

Get spooky with FreeForm’s31 Nights of Halloween month-long movie event.

Netflix brings horror to bear Oct. 26 with its original movie, Hellhole.

Let your inner history buff free with PBS’s Secrets of the Dead: “The End of the Romans”.

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