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Netflix plans to bar users from sharing passwords for free by the end of March of this year, according to a recent company announcement in a letter to shareholders.
Back in October, the streaming giant said it would begin charging subscribers who share their accounts but did not give a specific date or information for when the new policy would be enacted.
In a quarter four earnings report released late last week, Netflix revealed it would implement the paid sharing system across the platform in the latter portion of quarter one.
“Today’s widespread account sharing (100M+ households) undermines our long term ability to invest in and improve Netflix, as well as build our business,” Netflix said in a letter to shareholders. “While our terms of use limit use of Netflix to a household, we recognize this is a change for members who share their account more broadly.”
“So we’ve worked hard to build additional new features that improve the Netflix experience, including the ability for members to review which devices are using their account and to transfer a profile to a new account.”
The company noted that the new policy would likely lead to “near term engagement” being “negatively impacted” as some users stop consuming content on the platform due to the loss of a free account.
The effort to deter password-sharing will be relatively gentle in its first iteration, relying on a combination of technology and user conscientiousness to prod serial over-sharers into paying more for the privilege.
Netflix will likely use a person’s geographic location, as determined by the IP address of any internet-connected device, to figure out which people count as “household” members who live together and those that do not live together will need to use their own accounts to watch Netflix.
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