How Netflix detects password sharing and how to avoid it?

It's not at all good news for Netflix subscribers as the streaming giant has finally started a crackdown on password sharing. With this crackdown, many questions must be bothering you about the service. Therefore we have tried to cover these queries including how Netflix detects password sharing and how can you avoid it.

It's no 'more 'sharing passwords is sharing the love' for Netflix subscribers because the company has already started to end this practice in many countries. This password crackdown simply means that no one including your friends and relatives can use your password unless you have some better plan. This crackdown from Netflix can be seen as a well-planned move to improve the number of subscribers and bring its revenue back on track. As of April 2022, Netflix had lost subscribers for the first time in over a decade after revealing that over 100 million subscribers worldwide access Netflix through password sharing.

As a result of the launch of its lower-cost, ad-supported tier in the fourth quarter of 2022, the company gained 7.66 million new subscribers, and 1.75 million net new subscribers were added during the first quarter of 2023.

The crackdown has been in talks for a while now finally it has been implemented in the US, UK, India, and Australia as well as dozens of other countries around the world. Anyone who is sharing their Netflix password with anyone outside their household will receive an email from the streaming giant. Netflix will send you an email that your account is a 'single household' and give instructions on how to remove someone from it remotely.

As per the new policy, using and sharing one Netflix account is permitted as long as everyone lives together which the company describes as 'Household'. In this case, you can keep sharing your account as one household if you are a family or friendship group living at the same address. The only exception is if you are part of a group and don't live together then you won't be able to share a Netflix account. Sorry then, the free stuff doesn't exist anymore.

Why this Crackdown on Password Sharing?

Netflix believes that its ability to be one of the best streaming services is being compromised by members sharing passwords. People enjoy most of the Netflix shows with the help of password sharing but this no way contributes to the production or making of the new series and shows. Although their goal is to turn freeloaders into paying customers yet not everyone is willing to do so.

The main motive to stop password sharing is to boost its revenue growth. It has recently lowered prices in many countries such as India, Croatia, Indonesia, Kenya, etc which is why Netflix will turn off the extra member option there. Furthermore, these countries still have relatively low market penetration.

In late 2021, Netflix lowered its prices by 20-60 percent in India. As a result, the company grew by 30 percent the same year.

How will Netflix Stop Password Sharing?

There is no clear explanation of how Netflix determines whether a user is in your household. In an earlier announcement, Netflix described how it will use device IDs, IP addresses, and account activity from devices signed into one's Netflix account to identify who's part of a household. However, there is no clear definition of how people fit into a household. Still, documentation from Netflix describes a household as a collection of connected devices at a central point where you watch Netflix with a television as a centerpiece.

A multi-factor authentication method could also be used by the streaming giant to limit account access. When a device logs on from an unfamiliar IP address, the company may request to verify the IP address before allowing it to stream. Netflix will send a one-time code to the account's registered phone number or email address and the users will have 15 minutes to enter it or be locked out.

Many of you must be thinking about how to deal with this password crackdown when you are traveling or living between two different homes. The streaming giant has also clarified on its website about the same. The statement reads that Netflix wants its subscribers to enjoy the services anywhere and anytime. So, it should not be necessary for you to verify anything about your account while traveling if you are the primary account owner. The same goes for the people living with the account owner. Also, it's the same when you split your time between two different locations.

Impact on Users?

This is understood that Netflix will have to tread very carefully with this new password-sharing policy without hurting its viewership. Also, the company received mixed responses when it rolled out password limits in some countries last year by asking to pay additional fees if they wanted to share passwords with non-household members. These additional charges led to many users quitting their subscriptions while some of them were prompted to pay the asked price. Thus, the streaming company expected a similar kind of response in the US also. It, however, told the investors that the negative impact of password crackdowns can lead to a short-term decline in viewership but it will be impactful in the long term.

Spend Some Extra Bucks For Password Sharing

If you still want to 'share and care', you will have to spend some extra bucks for sharing passwords with your friends or relatives, or colleagues. If you subscribe to Netflix Premium, you can add two additional members, while those on a Standard Netflix Account can add one member only. It is the account holder who pays the extra membership fees for any additional members you add to the account. All additional members will have their account and password.

Can You Escape the Crackdown?

  • You will find many suggestions or tips online to escape the crackdown. One of the tips on Reddit suggested how to make it look like your computer is connected to your home network. It is free to use NordVPN Meshnet which is recommended by most users. Users can use the software to kind of convert their device into a server allowing others to access their network from anywhere. The new Netflix rule asks for most usage of one account to be done within one household unless you are traveling. This may assist users in complying with the new rule.

  • As of now, it appears that the block focuses on watching Netflix on television or streaming devices. In the meantime, the mobile apps seem to be allowed for viewing. Watching Netflix on your phone or tablet should still work without hassle.

  • Your Netflix account will not allow you to log in if you are trying from an unknown device and network. It will say that you are not a member of the household. In this case, you can go for the option of suggesting that you are on vacation and that will prompt Netflix to send a code to the account holder to verify. The code should be easy to obtain and enter your device if you are the account holder otherwise also you can ask for the code from the owner.

  • Another simple solution is to log in from the account holder's home as Netflix identifies households based on their network connections. This is because the streaming giant has not barred its users to enjoy the services while traveling. So, the service may still perceive you as a member of the household who spends most of the time commuting away from home.

Bottom Line

As Netflix has grown its paid subscriber base by approximately 5.9 million in the second quarter of 2023, it appears that its crackdown on accounts and password sharing has worked in the favor of the streaming giant. It currently has an impressive $238.4 million subscribers. Its paid account-sharing feature was launched in May in several major markets including the US and UK. There are now about 100 countries where the feature is available including India.

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