It Looks Like Netflix Is Cracking Down On Password Sharing

Our household said goodbye to Netflix last month due to yet another price increase, so this "problem" isn't one that I have to deal with. However, this move by Netflix has many users concerned.

If you've never pondered it, you might be wondering why password sharing on streaming services like Netflix is a big deal. Well, when you're talking billions of dollars in potential revenue going up in smoke, the people losing that revenue are probably going to want to do something about that...even if it's gone on for years.

According to a report by The Hollywood Reporter, in 2019 streaming services lost an estimated $9.1 billion from customers sharing their login information. That number is projected to rise to $12.4 billion in 2024.

Password, or log-in sharing also seems to be something that's handled differently, generationally speaking. A study from Hub Entertainment Research says that 31 percent of all consumers admit to having given one of their TV service passwords to someone not living with them. Among 13-24 year olds, 64 percent have given out a password, compared to just 16 percent of consumers age 35 or older.

Regardless of the age group doing it, Netflix has let it be known that they're tired of it, and that they're working on remedying the problem.

GammaWire.com was one of the first sites to pick up on a new notice, or warning, that some Netflix users have been finding on their screens when they open up the streaming service.

GammaWire.com:

The warning pops up and requests that users verify that it is in fact their account with a verification code. In other words, if you’re borrowing your ex’s account, good luck with that text asking for them to forward you the code. Most of the users that we have seen commenting on the test online also mention that they simply pressed “verify later” and the warning has yet to return a second time.

While I understand wanting to squeeze every drop of revenue you can from your customer base, especially when online streaming services are getting hyper-competitive, it strikes me as being a strange tactic after Netflix CEO Reed Hastings told an interviewer at the Consumer Electronics Show (CES) in 2016 that sharing Netflix log-in information and/or passwords was a positive thing for Netflix.

CNET.com:

Hastings, who earlier in the day also revealed Netflix was now in 130 countries, didn't address broad password swapping, but did say a household sharing an account was fine. A lot of the time, he said, household sharing leads to new customers because kids subscribe on their own as they start to earn income.