Netflix will charge customers who share passwords amid streaming service access crackdown

Netflix has announced it will start charging those who share the password to their streaming accounts with friends and family.

The digital streaming service platform first announced it was going to be taking a firmer stand against users abusing their account subscriptions earlier this year, following a slump in its earnings.

And since then, Netflix has devised a plan to make password sharing a whole lot harder.

Netflix has announced it will officially begin charging for account sharing early next year, in a letter to shareholders it outlined plans to introduce "extra member" sub-accounts, which will require users to pay an additional fee for friends and family members accessing their account.

The streaming service has not yet confirmed how much it plans to charge users but according to The Verge, it can be expected to follow a beta model already set up in Central and South American countries where it charges $2.99 - or 1/4th of the $12 monthly subscription fee.

Charging for extra members allows the company to start "monetising all that unpaid viewing," Netflix CFO Spence Neumann said on a call with investors on Tuesday. 

CEO Reed Hastings echoed Neumann on the call: "Everything the company is focused on, whether that's on the content side, on marketing, lowering prices to the ad supported, the paid sharing, the thoughtful approach we're doing there lines us up for a good next year."

Previously Chief product officer, Greg Peters, spoke at Netflix's Q3 2019 earnings interview, where he said that the company is looking to address the phenomenon head on.

He said, “We continue to monitor it so we're looking at the situation. We'll see those consumer-friendly ways to push on the edges of that."

The announcement comes after a study found that the average Netflix account has five people using it, but only one footing the bill.

Research carried out by MoneySavingHeroes.co.uk shone a light on the sneaky Netflix sharers, with more than 60% saying they had no intention of ever setting up their own account.

Those who pay for accounts were also asked if their friends and family contributed towards the fee, but 81% said they did not.

In addition to this, nine out of ten sharers said they couldn't afford their own subscription.

Netflix is remaining tight-lipped on just how exactly it plans to expose individuals using other people's passwords, but it has said it hopes to do so "without alienating a certain portion of [its] user base".

But news of a crackdown seems to be already paying off, as Netflix recently gained more than two million new subscribers in recent months, after losing subscribers in three consecutive quarters.

The news comes after the streaming service recently raised its subscription prices, with standard plans increasing £1 for new and existing customers. Similarly, premium account holders were faced with prices rising £2.

And Netflix is looking at introducing ad commercials to its subscription service.

Perhaps it will take a page out of the book of technology firm Synamedia? The company recently launched a new AI system to track account sharing. Those found to be sharing face a forced upgrade or a potential removal of their account.

Hopefully, the folks at Netflix won’t be so dramatic.

The good news is that it seems like there are no plans until 2023, so no need to get your own account just yet.