Netflix Counting Loss, Wants To Stop Account Sharing

Streaming giant Netflix has had enough of us hopping onto our mate’s/sibling’s/parents’ account and watching content for free, it seems.

Overnight, Netflix announced its plans towards inhibiting password-sharing between users.

In a bid to pick up the slack on subscriber potentiality (and therefore dollars) lost due to account sharing, Netflix is looking at ways to tighten access by testing out new restrictive measures around password security.

Basically, this means that even though your friend is happy to share their password with you so that you can access their account in your home, you could potentially no longer be allowed.

The proposed feature prevents people who are not authorised to use the account from accessing it. If the app detects an access attempt by someone who is not the account owner, the user will be asked to verify ownership via a code sent from Netflix by email or text.

If that user can’t verify within a certain timeframe that it is indeed their account, they won’t be able to stream any Netflix content. Instead, they’ll be asked to create an account.

Now, if they really wanted to, a wily account owner could always send their friend the code when they receive it, but the hope is that the new security measure will prevent a sizeable amount of password sharing.

While the plan isn’t targeting any particular country for any specific length of time, Netflix says that testing also aims to improve security measures around account protection. If there’s a malicious attempt to use an account by someone who’s gained a password through fraudulent methods, they won’t be able to access the account.

Netflix’s terms of service state that streaming content on the platform is “for your personal and non-commercial use only and may not be shared with individuals beyond your household.”

For subscribers, that raises a big question: what constitutes a household?

That may mean a physical household, so that housemates can use the same service at home. Or perhaps it means a family; families with kids living out of home can sign up for the family plan, which suggests the boundaries are not necessarily physical.

The test currently being conducted by Netflix uses this message when an illegitimate access attempt is made: “If you don’t live with the owner of this account, you need your own account to keep watching.”

When it comes to sharing accounts, Netflix, along with other streaming companies, once accepted the practice as a given. When the issue was raised back in 2016 along with fears for our right to share, Netflix co-CEO Reed Hastings said, “Password sharing is something you have to learn to live with. There’s so much legitimate password sharing – like you sharing with your spouse, with your kids – so there’s no bright line, and we’re doing fine as is.”

But those days of freedom may be over as Netflix is officially on the case to figure out how password sharing can be limited while also addressing security measures.

Password sharing has long been a concern posed by analysts and investors in the space. Research company Parks Associates estimated that password-sharing and piracy was responsible for a loss of around $9 billion for companies in the streaming space.

Currently, Netflix has around 14 million subscribers in Australia, with questions being asked as to how many actual people are using the service, as opposed to just those who hold an account.

Not only is Netflix looking into weeding out its ‘ghost’ users and therefore potentially upping its subscription count, but it’s also chasing lost revenue by asking Australian companies – specifically ISPs, subscription television operators and consumer electronics device manufacturers – to add Netflix to their devices.

It all coincides with Paramount Pictures, a CBSViacom company that also owns Network 10 in Australia, getting set to go head-to-head with Netflix as well as Stan, Foxtel, Binge and Disney Plus by launching its own streaming service.

Since launching in Australia in 2015, Netflix has already built several strong partnerships with local companies to deliver effective outcomes for Netflix, its partners and subscribers, claims Ben Cox, who was recently appointed Director of Business Development for Netflix in Australia.

Cox was previously VP, Business Development for ViacomCBS and has also held roles at Nickelodeon, Foxtel and AUSTAR Entertainment.

Also cranking up their streaming revenue are Apple, Amazon Prime and Google via their YouTube operation.