What Netflix’s Password Sharing Rules Are, and Why People Are Angry

Every three months, Brandi Anderson moves to a new city, filling her Jeep with clothes, kitchen supplies, a box fan and a small TV. A traveling emergency room nurse for the past three years, Anderson has worked in Brooklyn, Boston and DC, and is now based in a remote part of Northern California.

But her home, husband and primary Netflix address are all thousands of miles away in Midland, Ga.

Anderson is one of many longtime Netflix customers upset about the company’s new crackdown on sharing passwords, which rolled out in the U.S. this week and could prevent him from streaming down the road. After years of ignoring and encouraging password sharing, the streaming company is asking people who use a Netflix log-in for more than 31 days to get a separate account elsewhere or pay $7.99 a month to add it to a master account.

Affected Netflix users have taken to social media to complain about the new policy, and some are threatening to leave or switch to competitors with more lax sharing requirements, such as Disney Plus and Max.

“I’m not paying eight dollars yet, I’m not,” says Anderson, who plans to cancel his $19.99-a-month premium plan. “I pay a lot of money. I understand that the price will go up over time — it doesn’t bother me — but now I can’t use it for myself? That’s crazy.”

Can Netflix Survive the Backlash?

Netflix didn’t rush into this project and probably reckoned Some public outrage and some loss of subscribers. The company began testing implementation in smaller markets last year and rolled it out in Canada this year. A small amount of confusion is expected and probably temporary, analysts say.

“Every market has an initial frenzy,” says Rich Greenfield, media analyst at Lightshed Partners. “Then they publish a piece of content that people can’t live without, [and] After two months their numbers increased.

Greenfield says the company should focus on popular quality shows and movies. “The best way to get people to sign up for their own account or an additional account is content they can’t live without.”

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In an April survey, Wedbush Securities asked current and recent Netflix customers what they would do after the crackdown. 40 percent said they would not make any changes to their subscription, 30 percent said they would create a family or group plan, and 15 percent said they would cancel or quit Netflix.

“It seems the squeaky wheels are coming online to voice their grievances. I think the majority are bill supporters who are unhappy that they have to pay,” said Alicia Rees, Wedbush Equity Research analyst.

Not all Netflix customers are upset about the crackdown. Some were happy for the company to go after “freeloaders,” especially if their favorite shows got more revenue or their own monthly fees stopped going up. Netflix claims that 100 million people around the world use borrowed accounts.

“When freeloaders raise subscription rates, we subscribers get higher rates or less service,” Diane Averill of Pittsburgh said in an email. “If the company makes more profit, Netflix employees will be better paid, so a lot of people could be cheated by cheaters.”

Netflix declined to comment on the users’ response.

“This is an important transition for us, so we’re working hard to make sure we’re doing it as well and as thoughtfully as we can,” Netflix co-CEO and director Gregory Peters said on the company’s recent earnings call. In countries that have introduced the new policy, the company tends to see an initial number of cancellations followed by borrowers signing up for their own accounts and paying additional people, he said.

Netflix said An April letter “Our paid membership base is now larger and revenue growth has accelerated and is now growing faster than in the U.S.”

What’s next for affected streamers?

Some people are in situations where it doesn’t make sense to pay more. For example, paying subscribers who split their time between different locations, because they have a vacation home or for family reasons.

But many who received the notices were wondering who Netflix was targeting: parents sharing accounts with college students, adult children sharing accounts with their elderly parents, and groups of friends who split the costs of some subscriptions.

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Years ago, Amy Woodbury and her friends went together on a premium Netflix account. He says the company thought its business model no longer worked, but the change forced the team to cancel.

“I figure we’ll subscribe for a month or two a year to catch up on ‘Stranger Things’ and ‘Wednesday’ and watch some movies. But then we’ll shut it down again,” said Woodbury, 49, who lives in Santa Clara, Calif. “They forced me to really evaluate how much I value them, and the answer is definitely less than $10 a month, maybe less. More than $50 a year.”

When the new options first arrived in Canada in February, Sarah Taylor reluctantly agreed to pay the extra amount. He shares his account with his retired parents so they can watch “Bridgerton” and British crime procedurals. But when Netflix later said he had to upgrade his Basic account to qualify for membership, Taylor called it quits.

A customer support representative told her If she streams from her smartphone for a few minutes, goes to her parents’ house for 25 minutes, streams from her phone again to their wifi, and finally logs back into her account from their TV, she can share her account. She was told to do it every 14 days and pay her principal of $9.99 a month. She decided not to cancel.

“They’re crazy,” Taylor says. “A lot of people are going to ditch Netflix. I know a lot of that personally.”

For Courtney Levine, it’s all about the money and Netflix breaking an unspoken contract. Levin also pays into an account he shares with his elderly parents, but plans to cancel.

“When they first switched from DVDs to streaming, they pushed back on sharing your passwords,” Levin said. “We all have multiple accounts like Prime, Max, Disney. It’s not like we’re not willing to pay for things we love, you’ve built your service into a brand you can share with your family and now you’re changing it.

There is no shortage of alternatives. But Wedbush’s Reese warns that anyone thinking about making the switch to streaming could be following in Netflix’s footsteps in the future.

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“Netflix, they’re going to be the first to move this, and I expect other streamers to follow suit over time.”

What are Netflix’s password sharing rules?

While Netflix has been talking about its password plans since last year, the announcements this week in the US took immediate effect and took few people by surprise. Many were confused as to how the company was going to implement the program and were surprised to find that it was applicable to them. Here’s what we know so far:

  • Netflix states that an account can only be used by family members who share an internet connection. Additional members logging in from other locations can be added for $7.99 per month.
  • These restrictions only apply to televisions, not mobile devices. Once you have successfully logged in on a smartphone or tablet, you can stream it from anywhere.
  • You can still travel for up to a month without any problems. To avoid being logged out, people must connect to the primary location every 31 days.
  • If you are going abroad for more than 31 days or plan to stay abroad, you can change your home address.
  • It doesn’t matter which tier you pay for or your reasons for staying away from a primary address. The company does not make exceptions for extraordinary cases such as members who are deployed in the military.
  • Netflix mostly uses IP addresses to determine where people are logging in, but it also uses device IDs and account functionality.
  • It assumes your home location, but you can manually set your home location from Netflix on TV by going to → Get help. Manage your Netflix family.
  • You can only add additional members to the expensive Standard and Premium plans and the number of additional members is limited. (One extra in Standard, two members in Premium.)
  • No penalties for sharing, no door-to-door Netflix police. Streamers from secondary locations will be kicked out.

Here’s a guide to navigating the expensive landscape of streaming and digital entertainment.

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