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How the Netflix password sharing crackdown works — what you need to know

By Henry T. Casey

 published about 12 hours ago

Who’s in Netflix’s crosshairs on password sharing?

(Image credit: pixinoo / Shutterstock.com)

The countdown to the big Netflix password sharing crackdown is on — and so we thought this was a good time to break down the nitty gritty of it all. Over the last year, this titan of the best streaming services has revealed that millions(opens in new tab) are (either wittingly or unwittingly) breaking the rules.

Yes, the habit of sharing your Netflix login with friends or family is actually against Netflix’s terms of service. How so? According to Netflix’s own site, “A Netflix account is for people who live together in a single household.” This will make some want to say “define ‘household?'”

But Netflix has already begun its password sharing crackdown, with testing having originally begun in Peru, Chile and Costa Rica. And in recent earnings, the service has basically set a timer for the worldwide release of this new project.

Fortunately, we know a bit about how it will work, based on that testing and Netflix’s own FAQ’s. 

The Netflix password sharing crackdown targets these users

As you may have gleamed from above, this is all about location. Netflix is trying to make sure its passwords are only being used within the same household, and by that it means the premises you use. 

Netflix’s own help section(opens in new tab) (as our sister site TechRadar(opens in new tab) spotted) has a brief explanation for how it “detects devices within a household.” The service claims it uses “information such as IP addresses, device IDs, and account activity from devices signed into the Netflix account.” Here’s an example of how it looks:

To break that down, an IP address (often seen as a series of period-separated numbers such as “192.0.2.1”), is a way to identify your device’s location both on your network and on the internet. Some use one of the best VPN services to obfuscate their IP address to watch content (often on Netflix) they’re not supposed to that’s meant for those in other countries. As for Device IDs? Mobile devices bear a unique and anonymized set of numbers that is used for many a reason. 

By collecting all of this data, Netflix can basically identify a series of devices it believes are a part of a single household. Any device that doesn’t fit? About that…

Netflix’s password sharing crackdown is all about money

Netflix has offered users in Latin America an ability to “add a home” to their Netflix account, basically a way to keep doing what they’re doing, except paying Netflix more — the one thing people don’t want to do. 

Netflix(opens in new tab) is charging $2.99 (around CAD $3.99 / £2.50 / AU$4) per month per home in the Dominican Republic, El Salvador, Honduras and Guatemala. Users can add up to three extra homes — that’s on the Premium $20 per month tier — but Basic plans are limited to one extra home and Standard plans cap at two.

Ways around the Netflix password sharing crackdown

While this may change soon, Netflix currently offers a device verification method for those who believe they were erroneously flagged. According to Netflix(opens in new tab), it will email a four-digit verification code to the account holder. The person using the account will then have to input that code in the next 15 minutes. 

This is not a one-and-done situation, as Netflix notes “Device verification may be required periodically.” Which is basically saying that repeated use will get very annoying. Netflix is going to be a bit strict, as its FAQ states “As long as the device being used to watch Netflix is using the internet connection in the primary account owner’s household, we will not require verification.”

Will the Netflix password sharing crackdown hit mobile devices too?

But what about vacationers? And people on the subway? Well, Netflix believes it won’t be stopping them. Its FAQ page also notes “If you are traveling or live between different homes, we want you to be able to enjoy Netflix anywhere, anytime. If you are the primary account owner (or live with them), you shouldn’t need to verify your device to watch Netflix.”

The words “shouldn’t need” loom large, though. And, unsurprisingly, this is where device verification will come into play again, as Netflix notes “If you are away from the Netflix household for an extended period of time, you may be occasionally asked to verify your device.”

Outlook: Netflix’s password sharing crackdown looks like a process of pestering

Netflix’s big strategy, it seems, is about making it very annoying to share an account. It’s as if someone from Netflix will be laughing as you ask your parents for the six-digit code, and the situation will push your parents to ask “wouldn’t you rather just pay a little more?”

All of this, as you might gather, means that Netflix is ready to irritate some subscribers in order to get more money from others. So, while Netflix’s social media account once tweeted(opens in new tab) “Love is sharing a password,” that’s clearly changed.