Netflix’s Approach to Curb Password Sharing Won’t be Too Aggressive

Back in March, we reported on Netflix testing ways to crack down on password sharing by sending out a verification code to the account owner’s device. Naturally, this started a buzz among subscribers that wasn’t necessarily well-received. One survey revealed that 78% of cord-cutters share passwords for video streaming services and that 54% of Netflix users are likely to cancel their subscription if the streamer enforces a no-password-sharing policy.

But Netflix co-CEO Reed Hastings assured subscribers during Tuesday’s Q1 earnings call that there won’t be any extreme measures taken to prevent sharing your account with others.

“We’ll test many things, but we would never roll out something that feels like ‘turning the screws’” on people who enjoy the service,” Hastings said. “It’s gotta feel like it makes sense to consumers, that they understand.”

Netflix’s subscriber growth has slowed down recently amid an influx of new streaming services bursting onto the scene. Netflix reported Tuesday that it finished Q1 2021 with 208 million paid memberships – a 14% increase year over year – but fell short of its projection of 210 million subscribers. Revenue increased 24% year over year and was in line with forecasts.

If Netflix could turn some of those password-sharing viewers into paid subscribers, the streamer’s numbers would be a lot higher. Netflix could possibly be losing millions each month due to non-paying viewers sharing accounts.

The password-sharing problem is not new by any means. In October 2019, Netflix execs shared during a quarterly earnings call that they were monitoring password sharing and looking at “consumer-friendly” ways of preventing it.