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Netflix knows you’ve been sharing your passwords, allowing your mom, your cousin, your ex-boyfriend, a few people in your dorm, a friendly stranger you met on vacation once … well, a lot of people use your account. Who can blame you? They really wanted to watch the latest episodes of Bridgerton and Stranger Things! And whom does it hurt?

For years, the streaming service largely agreed. It more or less looked the other way, even while gently asking customers to please just quit it. But recently, Netflix came at the issue with a different direction—announcing that subscribers can share their account with whomever they want, but now they are going to be charged for that altruistic gesture.

In a third quarter earnings call, Netflix indicated it planned to introduce the new charges in 2023. But the strategy is not totally new; Netflix already has rolled out account sharing fees in Chile, Costa Rica, and Peru, followed by Argentina, El Salvador, Guatemala, Honduras, and the Dominican Republic.

That Netflix is expanding this program to the United States suggests that its Latin American trials have been going well—though the meaning of “well” may depend on whom you’re asking. For example, some reports describe mass protests in response to the fees on social media, and other journalists offer anecdotal evidence of subscribers canceling their subscriptions in protest. Notably though, no evidence has emerged of people leaving the platform en masse, despite the increased costs of subscribing.

Other streaming services also have tried to tackle the problem of password sharing. Hulu, for example, only allows each account to appear on a limited number of screens. HBO Max instead flags the most egregious abusers for attention.

Netflix is trying a carrot with the stick too: In addition to offering users the option of paying for friends and family to make profiles on their accounts, they are also rolling out a new, affordable, advertised-supported service called Netflix Basic. Your mom, cousin, ex-boyfriend, dorm mates, and favorite strangers can transfer their profiles, preferences, viewing history, and recommendations to their own new Netflix Basic accounts, which will cost just $6.99 a month.

Discussion Questions:

  1. Is it a good idea for Netflix to try to monetize password sharing?
  2. What are some other ways that streaming companies could discourage users from sharing passwords?
  3. Are there any reasons that streaming services should or might strategically allow users to share passwords?

Sources: Andrew Tarantola, “Netflix Will Begin Charging ‘Extra User’ Fees Early Next Year,” Yahoo, October 18, 2022; Kelsey Sutton, “A Crackdown on Streaming Service Password-Sharing Is Coming,” Morning Brew, May 3, 2022; Emma Roth, “Netflix Password-Sharing Crackdown Will Roll out Globally in ‘Early 2023’—and Here’s How It Could Work,” The Verge, October 18, 2022; Lucas Manfredi, “Netflix to Begin Monetizing Account Sharing in Early 2023,” Fox29, October 19, 2022; Andrew Deck and Lucía Cholakian Herrera, “Netflix Expands Its Password-Sharing Crackdown,” Rest of World, September 27, 2022