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Netflix Crackdown on Password Sharing Isn't All Bad

Netflix Crackdown on Password Sharing Isn't All Bad

Netflix Cracking Down on Password Sharing

March 16, 2021

Streaming services have a love/hate relationship with account sharing. On the one hand, they realize that not everyone who wants to use their service has the money to do so. On the other hand, if more people signed up for their own accounts, they'd make more money. Netflix, in particular, has rules against password sharing, but it hasn't enforced them. Until now. However, the hand-wringing bout the company's new clamp-down efforts may be premature.

Streamer's Spotlight: Netflix's Crackdown on Password Sharing Isn't All Bad

Well, it looks like Netflix has finally made its move. After improving its geographic content blocking efforts several years ago to prevent region hopping, the company is now coming for the password sharing ecosystem that technically breaks its ToS. In reality, however, those who pay for Netflix accounts should be cheering the effort.

Let's Face It: Password Sharing Costs Netflix Money

It's probably a bit of a stretch to call password sharing outright theft. After all, Netflix has simultaneous streaming limits in place. Those limits, depending on the subscription tier, are what an individual account owner is paying to receive. So if they're sharing a password on the Basic tier, only one person can watch at a time. Allowing someone else to watch while you're not using your account could hardly qualify as theft in the traditional sense of the word.

However, without password sharing, many individuals who would otherwise pay for accounts get skirt by saving themselves a few bucks a month. At least one study shows around

33% of Netflix users

share their passwords with at least one other person. At $8.99 per month at a minimum, that means Netflix's unrealized subscription profit could be in the hundreds of millions of dollars per year.

Password Sharing Crackdowns Could Reduce Price Increases and Increase Content Budgets

Let's play with a hypothetical. Let's say Netflix is suddenly sitting on an extra $100 million per year in subscription revenue. What could it do with that money? Not raise subscription prices, for one thing. The company has taken a fair amount of heat for increasing prices, especially on US customers.

The company technically

has a negative cash flow

as it's spending big on original content. Having some extra liquidity would be a boon for the company, obviously, but have positive effects for customers, as well. More money in Netflix's pocket means more money the company has to spend on the things customers want, and less impetus to increase prices to get that money.

Alternatives to Password Sharing

Netflix could, of course, throw its freeloading customers a bone. Their saving grace could be a built-in "Watch Together" feature. Disney+ now includes a party watch feature, and there are multiple third-party apps available that allow Netflix account owners to

watch with friends and family

Netflix is missing a huge opportunity by lacking this feature, but knowing the company, it's likely going to roll out that feature sometime this year after its password sharing crackdown is in full force.

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1. Michelle Obama Makes Her Netflix Series Debut

The former First Lady hits the Netflix web waves with her new kids' show Waffles + Mochi today, March 16. -

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2. MCU Continues on Disney+ With 'The Falcon and The Winter Soldier'

Can Disney+ continue the win it had with WandaVision? Find out this Friday as it's new show

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premieres this Friday, March 19. -

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3. Even More 'Doctor Who' to Love this Sunday on BBC America

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