Netflix: Relax, We're Not Cracking Down on Password Sharing

Netflix wants you to relax: It's not preparing a widescale crackdown on password sharing. 

Fears of crackdown came up last month when at least a few users encountered a new security measure that can block access to a Netflix account if you don’t live in the same household as the actual account holder. 

This prompted a financial analyst to ask Netflix executives during a Tuesday earnings call whether the company was “tightening the screws” on account sharing. In response, they said Netflix was merely conducting a routine test to keep strangers out of people’s accounts. 

“We will test many things, but we would never roll something out that feels like turning the screws,” Netflix co-CEO Reed Hastings said during the call. 

Hastings went on to imply that a crackdown on password sharing would put off too many legitimate users, who willingly share their accounts with family members. Hence, the company's tests to stop strangers from accessing accounts will remain targeted, rather than pervasive. 

“It's got to feel like it makes sense to consumers that they (the users) understand,” he said. “And Greg (Netflix’s chief product officer) has been doing a lot of great research on...how to try variants that harmonize with the way consumers think about it.”

That said, Netflix may be facing slowing user growth. During this year’s first quarter, the company only added 4 million paid subscribers, down from the 15 million it gained a year ago. However, Netflix points out that the onset of the COVID-19 pandemic likely drove unprecedented user growth to the service last year. 

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COVID-19 also stopped production on many TV shows and movies. Thus, the company has “a lighter content slate in the first half of 2021,” which Netflix executives believe will result in slower user growth during the period. 

A strict crackdown on password sharing could force some freeloading users to become paid subscribers. But Netflix executives said they prefer to work around the edges. “Optimal business opportunity is trying to figure out a way to best serve our members and trying to figure out the models, the plan types, the right price points, the right features that really work for them in a natural way,” said Netflix Chief Product Officer Gregory Peters.