Of the three subscription plans that the Netflix platform offers, the Standard and Premium plans offer the option of sharing an account on several devices with up to 2 and 4 people respectively. However, as Netflix points out on their website, only people who live together can use the account. Sharing an account with friends or family is legal, but only if they live in the same house.
According to the Pew Center for Internet and Technology, about 2 in 5 online adults have shared VOD platform account passwords with friends or family. Among the Millennial generation, this number is even higher with 56% of online adults between the ages of 18 and 29 sharing passwords with others.
In a conference on financial results last year, the CPO of Netflix Gregory K. Peters made it clear that they were studying how to end the practice of sharing standard and premium accounts among multiple users in different households. Two years later, Netflix is taking measures to combat password sharing.
Last January, Netflix tested a new function that warns people who share their password with someone outside their household to pay their own bill. This feature requires users to enter a verification code sent via text or email that confirms they are the owner or a member with direct access to the same password. Sharing passwords costs streaming services several billion dollars a year in lost revenue.
Netflix is currently launching a trial in Chile, Costa Rica and Peru, which allows Standard and Premium plan members to add subsidiary accounts for up to two people they don’t live with for an extra $2.99 per person added, each with its own profile, personalized recommendations, login and password.
As the platform reviews the trial, there is speculation as to whether this feature will become available worldwide and if users will be willing to pay extra for the ability to share their account with someone outside their household. Research firm Park Associates has estimated that sharing or stealing streaming service passwords cost an estimated $2.5 billion in revenue in 2019, with that number expected to rise to nearly $3.5 billion by 2024.