The Netflix password crackdown: How will it affect user experience?

Netflix is the ultimate entertainment hub, with an impressive collection of horror, comedy, thriller, rom-com, fantasy, fiction, animation, and multiple other categories. Using a VPN server to access other libraries and sharing accounts with various users was for many considered the charm of this streaming giant. 

There was a time when Netflix users searched for ways to watch American Netflix in the UK, but the media giant’s password crackdown has changed the landscape. For those used to sharing a Netflix account with others, the news is sad: it looks like the fun will end soon with the impending test rollout of the new Password Sharing Crackdown.

This new policy will alert users if there is any suspicion that they are streaming on or accessing a borrowed Netflix account. The message seems to be, “If you don’t live with the owner of this account, you need your own account to keep watching.” In this instance, users are then asked to sign up for the free 30-day trial to keep enjoying the service, or are allowed to continue enjoying the service upon entering the confirmation text sent via email or text. The approach ensures that whoever is using an account is authorised to do so. 

The good news is there is time for movie lovers to get their own Netflix accounts because, currently, the policy has only been tested on Smart TVs. It is not clear whether IP addresses will be used to control the account, but anyone with a pending movie playlist should enjoy it before the absolute implementation of the new rules.

Why are Netflix enforcing this new rule?

The main reason for this crackdown is based on Netlix’s (probably well-founded) suspicion that passwords are being shared, not just with family members and housemates, but with aunts, uncles, exes, significant others, and everyone else in between. The streaming platform wants to ascertain that an account is shared by family members living in the same house, presumably to insure revenue remains optimal.

The crackdown will impact ineligible users, but it is still unclear how many are violating the new rules. The final decision as to whether the rules will be implemented across the entire network is still pending.

Even though many believe that Netflix is better than Disney Plus and other streaming services, including HBO Max, Amazon Prime Video and Hulu, most providers mimic this strategy. Though these services allow the user to create multiple profiles, they are supposed to be used by family members only.

Netflix co-founder and chief executive Reed Hastings said in a 2016 webcast: “Password sharing is something you have to learn to live with, because there’s so much legitimate password sharing – like you are sharing with your spouse, with your kids, so there’s no bright line, and we’re doing fine as is.”

Though Netflix’s stance regarding password sharing was clear, the excessive use of the loophole was never appreciated by the company, making them seriously think about approaches to preventing it.

What does the password crackdown mean for users?

The password crackdown will only limit access for those without legitimate accounts – anyone able to provide the confirmation code is good to go; otherwise, they will be signed out of the account and asked to enter their credentials again. If Netflix completely implements the new rules, users will have to sign up for the service and create a new account.

This issue is especially troublesome for family members and account sharers who are not living in the same house, because there is a chance Netflix will use the subscriber’s IP address to evaluate whether they are accessing the service from the same network. 

It seems clear that the number of users making use of the streaming service without a subscription will decrease. To enjoy the expansive content library, users will have to subscribe to a new account to continue enjoying the services.

Netflix gained almost 37 million new subscribers in 2020 and now has more than 200 million subscribers around the world. This number will increase if the company goes ahead with a password crackdown, as accounts in their current format will only be possible to share with family members. Either the subscription costs will increase in return for the freedom to share, new accounts will be necessary, or users will shift to different streaming platforms. 

With various services available, the strategy is a risk that could pay off for Netflix or significantly decrease their membership. As they are confident in their position as the best streaming service, Netflix are willing to take this risk. 

In sum

Having conducted research with a wealth of data, as well as employing consumer psychology hypotheses and machine learning, the password crackdown is intended by Netflix to be their most recent attempt to improve the user experience and prevent ineligible users from using the service. 

Those living in the same house can keep enjoying the service without any worries, but for film fans using shared accounts, it’s time to plan for the future and invest in a personal account. Let’s hope that the restrictions won’t come to this!

The editorial unit