When will Netflix start charging for password sharing?

(NEXSTAR) — Whether you’re sharing a Netflix password with someone or borrowing someone’s password, be prepared to pay for it. The streaming giant has warned that a crackdown on password sharing was imminent and it looks like they’re almost ready to roll out new rules.

In a letter to shareholders last week, Netflix said it expects paid account sharing to roll out “more broadly” by the end of the first quarter of 2023. Netflix estimates that more than 100 million households share accounts, which “undermines our long-term wealth.” to invest in and improve Netflix.”

Executives explained in the letter that they expect some users to cancel their accounts when paid sharing launches, but that “borrowing households” will open their own accounts.

How the paid password sharing will be enforced and how much it will cost has not yet been released.

Features Netflix tested in Latin America last March cost about $3 or $4. During last week’s earnings call, COO and Chief Product Officer Greg Peters said the company is working to find “the right price points.”

Netflix was already looking at ways to tackle password sharing in 2021 when it tested a login verification process. If a user whom the company suspected was not the account owner tried to log in, Netflix sent a code to the account owner via email or SMS. That code had to be entered within a certain time, otherwise the user would not be able to access the service.

In March 2022, Netflix began testing two new features: one that allowed members to add a sub account for people who live outside their household for a small fee, and the second that allowed users sharing an account to transfer their profile information to a new account or subaccount – in Chile, Costa Rica and Peru.

In these countries, Netflix warns that devices that connect to your account from outside your household may be blocked. Netflix can detect devices outside your home using information such as “IP addresses, device IDs, and account activity of devices logged into the Netflix account.”

A month later, executives hinted at another crackdown after blaming password sharing and increased competition from other streaming services for the first loss of subscribers in more than a decade.

In July, Netflix tested a separate feature in another round of countries that allowed users to purchase additional “houses” to use a TV or TV-connected device outside of their household, The Verge reports. Users can purchase the extra “home” to allow users to access Netflix outside their home. Any TVs not connected to the extra house were blocked after two weeks, Netflix said.

Then in November, Netflix launched a new feature that lets you watch devices streamed from your account and sign out devices you don’t want to access “with just one click.” While Netflix suggested using the feature to sign out of a hotel TV or friend’s device while traveling for the holidays, you can also remove any device using your login.

Netflix’s move to address password sharing is a shift from the company’s previous view of the common practice. Then-CEO Reed Hastings (he stepped down as CEO last week) said in 2016 that Netflix would not charge users for sharing their passwords. Instead, he called password sharing “something you have to learn to live with,” CNBC reports.

Hastings had also never been a fan of advertisements, calling them a distraction from the entertainment the service provides. But in November, Netflix launched a fourth plan, “Basic with Ads,” which includes “an average of 4 to 5 minutes of ads per hour.” Users with this subscription also do not have access to the full library of Netflix.

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