Australian Netflix users are reeling after the streamer announced a crackdown on password sharing – and it could be a sign of things to come as other streamers look to follow suit.
Netflix’s move will be a major blow to the thousands of families who share their login details – and the cost of a subscription – with relatives who no longer live at home.
Emails began landing in subscribers’ inboxes on Wednesday, alerting them that their IP address was being used to determine whether all of the account users live under the same roof.
If someone is using the account from another location, they will be kicked off the account.
A new payment plan will allow users to add an “extra member” to standard or premium plans for an additional $7.99 a month.
Up to two users, depending on the plan, will be able to get cheaper access to their own Netflix account on one device in another location.
Now, attention is turning to other major streaming services, with users left wondering whether Netflix’s tough new rules could become the new normal.
Speaking to the ABC, Ramon Lobato, an Associate Professor at RMIT’s School of Media and Communication, said we could easily see other major streaming services follow Netflix’s lead in future.
He explained that providers have long had the technology to stop password sharing outside individual households, but have held off while they were busily growing their profile and subscription base.
“Now, as the streaming market has matured and subscriber numbers are starting to plateau, the strategies are shifting again,” he told the ABC.
“Providers are becoming more focused on maximising the revenue that they can generate from each customer.
“Hence the password-sharing crackdown; the aim is to encourage password-sharers to sign up for separate accounts or to move them to a higher payment tier.”
It comes as a recent Finder survey revealed 41 per cent of Australians share a password for a streaming service with a friend or family member living in another house.
That’s equivalent to over 8 million people who share a password with someone else.
The research also found 31 per cent share a Netflix password – equivalent to 6.3 million people – with almost three-quarters of Gen Z guilty of sharing.
Of those that share a password, 43 per cent said they would drop the streaming service or cancel their subscription if they introduced an extra fee for sharing a password, while 22 per cent would look for ways to avoid paying the fee and continue to share their password.
Finder streaming expert Mark Neilsen said it was likely the Netflix password crackdown could soon become a wider trend.
“With most of the streaming services we’ve seen some great deals, sign up offers, and a lax approach to password sharing. But most streaming services technically don’t allow password sharing as part of their terms of service, yet they don’t enforce it even though lots of users do it,” he explained.
“Netflix is the first streaming service to put a stake in the ground and really crack down on password sharing.
“Streaming services are now turning their attention to making profits over gaining subscribers, so you would expect more companies to be cracking down on password sharing as a way to make more money.
“Netflix is often a first-mover in the streaming space, so the other streaming services will no doubt be watching. If this move by Netflix is successful and increases its revenue by a substantial margin, I think the others are likely to follow suit.”
He said those concerned about the extra cost from Netflix might need to consider shifting to a better streaming service.
It will be a major blow at a time when so many expenses are already rising. Picture: Olivier Douliery/AFP
“Adding one extra member to the Standard Netflix plan will take the monthly cost to $24.98, which makes it one of the most expensive general entertainment streaming subscriptions,” he said.
“You can get other streaming services for a lot less per month, which also allow viewing on more devices at the same time.
“Don’t forget – you can always switch your streaming subscription on and off. Just have it active when a show you want to watch is airing, and once it’s finished, you can cancel and rejoin when the next show comes along.
“Doing that could save you plenty each year, especially if you subscribe to multiple streaming services.”
News.com.au contacted Disney, Stan, Binge and Amazon for comment regarding their password sharing plans.
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However, there is good news for Apple subscribers.
The platform actually has an opposite policy to Netflix’s built in, allowing family sharing with all their subscription products that is not household specific.
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