Netflix struggles with password sharing crackdown policy enforcement
posted Sunday Jun 5, 2022 by Scott Ertz
Netflix has long had a policy against password sharing. Officially, an account is only to be used within a household. However, sharing passwords among friends has become a big thing. Now, Netflix is looking for ways to limit the amount of password sharing happening, but the tests in Chile, Costa Rica, and Peru have not been going quite as well as the company had hoped.
What's the problem?
Netflix has been having a rough go lately. The increase in industry competition combined with lackluster new productions has led to the first loss of subscribers in over a decade. As a result of this subscriber loss, the company has decided to address issues not related to their subscriber loss - particularly reducing or eliminating password sharing.
This practice has existed on Netflix for years. In fact, it's pretty common for a group of friends to each subscribe to a different service and then share the account passwords between them. So, one person pays for Netflix, one for Paramount+, one for Hulu, one for Disney+, and one for HBO Max, and all 5 of them create profiles and share accounts. Unfortunately for these users, all of these services prohibit the practice. Fortunately, none of them have actively enforced it. Until now.
Netflix has decided to go after password sharing. The company has begun tests, particularly in South America, alerting users to external usage and policy violations. Users are shown a notification of the issue and told to continue current usage they needed to pay more for the external service access.
What's gone wrong?
The process has not gone exactly as hoped. In fact, it seems to be having an inconsistent and negative impact on customers and support staff. According to an interview with an anonymous Netflix support member, customers are having fairly chaotic experiences. First off, most users who actually are sharing passwords aren't getting a notification at all. Those who are, some of whom aren't doing it, are calling in to complain. When a complaint comes in, support is able to bypass the alert and allow users to go about their lives as before. According to the report,
The anonymous customer service representative said that she was instructed that if a subscriber called arguing that someone from their household was just using the account from another location, she should inquire further and tell the subscriber that they could use their account without extra charge via a verification code. The anonymous Netflix employee herself still shares her account with friends outside her household and has yet to be notified of any extra charges.
Others who have not been given the ability to go about their lives have opted to cancel their service entirely. Cancellations are exactly what Netflix is trying to avoid, or at least stem the costs of, yet their enforcement of their policies are beginning to have that exact effect.
Netflix is going to have to figure out how to handle these issues before they even begin to consider rolling these policies out globally. The service is already the most expensive in the industry and an additional $3 per month (or about 20% increase) is likely to drive far more users away than it is to raise Netflix's revenue.