Netflix password crackdown expands to more countries, including US and UK

The streaming service began blocking freeloading viewers in Latin America last year

Netflix is stepping up its crackdown on users sharing passwords with people beyond their immediate family as it seeks to shore up revenue. AFP

Netflix has extended its crackdown on users sharing passwords with people beyond their immediate family.

Subscribers in the UK and US received emails from the streaming service on Tuesday informing them of the clampdown, and offering them alternatives.

It wasn't immediately clear when the new policy would be enforced in the Middle East, but Netflix said it was extending it to more than 100 countries.

In February, it began blocking freeloading viewers in Canada, New Zealand, Portugal and Spain, following similar moves in Latin America last year.

“A Netflix account is for use by one household,” Netflix said, while announcing the expansion of the new password policy in the UK and US.

In the email sent to subscribers, the company offered alternatives to those wishing to share their accounts with others outside their household. Users can either transfer their profiles to another account or buy an extra member for their account.

The cost of adding an extra member is $7.99 in the US and £4.99 in the UK, both of which are cheaper than a basic ad-free subscription.

Netflix said earlier this year that more than 100 million households were sharing accounts at the service, “impacting our ability to invest in great new TV and films.”

According to independent tech analyst Rob Enderle of Enderle Group, the streamer is also trying to reduce theft of its service.

He reasoned that Netflix probably pays royalties when subscribers watch some shows or films on the platform, so non-paying viewers could add to the service's expenses while not contributing to revenue.

“In theory, Netflix loses money because they are paying royalties and people are getting the shows for free,” Enderle told AFP. “It makes no sense for Netflix to allow that to continue.”

Netflix in April said its subscriber numbers hit a record high 232.5 million in the first quarter of the year and that its nascent ad-supported tier was faring well.

The company said in a recent presentation to advertisers that it had more than five million subscribers to its ad-support tier.

Netflix co-chief executive Greg Peters acknowledged last month that the crackdown on password sharing was likely to trigger an increase in subscriber cancellations, but expressed confidence the company will be better off in the long run after people adjust to the clampdown.

“We see an initial cancel reaction, and then we build out of that both in terms of membership and revenue as borrowers sign-up for their own Netflix accounts,” Peters told analysts.