The world’s largest streaming service is introducing new limitations on password sharing in an effort to crack down on customers who use, but don’t pay for, a Netflix account, with the changes rolling out this week in Australia.
Starting today, May 24, Netflix users in Australia will no longer be able to share their password with family or friends if they don’t live together in the same household.
On Tuesday, Reuters reported that Netflix was in the process of emailing customers in 103 countries and territories (including the United States, Britain, France, Germany and Brazil) about the new changes. The email informs users that a Netflix account should only be used in one household. Paying customers can add a member outside their households for an additional fee. In Australia, the fee is $7.99 per month.
Netflix says the changes are being rolled out as account sharing undermines its “long-term ability to invest in and improve” the service, and an estimated 100 million households share passwords with others.
Last year, Netflix surprised many investors when it saw a drop of about 200,000 subscribers. Some $54 billion was wiped out of value, and by September 2022, Netflix shares had fallen 62% compared to the previous year, leading many to question whether Netflix’s golden era as the undisputed leader in streaming had finished.
Netflix responded with bullish plans to shore up its revenue base through advertising and (you guessed it) cracking down on password sharing by turning lurkers and freeloaders into paid subscribers.
Ultimately, the changes will prevent users from sharing their accounts with people who don’t live in their immediate household, meaning many Australians will lose access to accounts they are using but don’t own.
These changes were implemented in Canada, New Zealand, Portugal and Spain earlier this year in a test case. According to the company, there has been a “cancellation reaction in each market when we announced the news” about the crackdown on password sharing, but then you see “an increase in acquisitions and revenue.” Only time will tell if that is the case in Australia.
Here’s what the new rules will mean for Australian subscribers.