Netflix's password sharing crackdown is finally happening

For those using their significant other's or best friend's Netflix password, it's the end of an era: Netflix password-sharing is about to get difficult, with the streaming site actually set to crack down on this in early 2023.

In the company's earnings report released yesterday, Netflix announced that password-sharing will be made unavailable early this year, likely before March, which will restrict simultaneous use of Netflix accounts beyond households. Instead, the company is focused on pushing its paid sharing option as well as its lower priced subscription plan with ads.

"Later in Q1, we expect to start rolling out paid sharing more broadly," Netflix's report reads.

Netflix said that account sharing, which it attributed to more than 100 million households, "undermines our long term ability to invest in and improve Netflix, as well as build our business." The clampdown isn't a new intention on Netflix's part; previously, it's tested extra fees and teased charging for shared accounts as far back as 2021.

"While our terms of use limit use of Netflix to a household, we recognize this is a change for members who share their account more broadly," read Netflix's report.

"So we’ve worked hard to build additional new features that improve the Netflix experience, including the ability for members to review which devices are using their account and to transfer a profile to a new account. As we roll out paid sharing, members in many countries will also have the option to pay extra if they want to share Netflix with people they don’t live with."

Under the new terms, a single Netflix account can be used by those living under one roof, keeping household to its strictest definition. This was already tested in the Latin American market, where those sharing passwords had to pay the new additional fees. The new rules resulted in some "cancel reactions," says Netflix, however the company expects "borrower households" to run with the new rules and set up their own standalone accounts, which would ultimately improve revenue for the company. Whether people actually do that or not remains to be seen — but Netflix is hopeful.

Meanwhile, all members can still watch Netflix while traveling, on any given device.

According to the Wall Street Journal, Netflix is the first streaming service jumping on a password enforcement policy. How exactly the company will enforce these adjustments has not been disclosed. However, Netflix launched a "profile transfer" feature in October 2022, likely gearing up for the coming process. With this, a person can transfer their Netflix profile (meaning the log of everything you've watched and your watchlist) if start their own membership.

Netflix is facing fierce competition from its peers, both old and new — and after losing one million subscribers in 2022 after raising prices, the company is making big moves to reestablish itself. The company looks like its found its footing, spending $17 billion on content in 2022. But Netflix's competition extends to video streaming platforms like TikTok and YouTube, as the company writes in its report.

"It’s not easy to build a large and profitable streaming business," reads the report. "But we’re competing from a position of strength, as we lead the industry in terms of engagement, revenue and streaming profit."

Looks like you've got just a few more months of password sharing before you'll need to pay up.