Although exchanging passwords with people who aren’t family is legally against Netflix’s terms, it’s also something the company hasn’t done anything to avoid or even discouraged in the past. For the most part, Netflix has seemed content to let users share their passwords widely and charge people who want to watch on more than one screen simultaneously.
However, there have been rumors that Netflix’s stoic attitude toward password sharing is about to change. Some Netflix users began receiving a warning earlier this year stating that they must sign up for their account if they do not live with the owner of the signed-in account.
Netflix explained at the time that it was conducting a test to “ensure that people using Netflix accounts are allowed to do so.”
Even if they did not widely view it, the message led many to believe that Netflix would eventually start taking password sharing seriously. It’s worth remembering that about 33% of Netflix users share their passwords with others who aren’t relatives.
Remember that according to Netflix’s terms of service, “the Netflix service and any content accessed through our service are for your personal and non-commercial use only and may not be shared with individuals outside your household.”
In light of the above, Netflix CEO Reed Hastings was explicitly asked during the company’s earnings conference call this week if the company planned on “turning the screws.”
When Nidhi Gupta asked the following question, the subject arose:
You’ve started to run some tests and in certain markets, I think maybe just the U.S. on limiting account sharing. Can you talk about the size of the opportunity here, and why now is kind of the right time to ask start tightening the screws on that?
“We will test several things,” Hastings replied, “but we will never roll out anything that feels like turning the screws, as you said. It must seem to customers that it makes sense and that they comprehend it. We’ll test a lot of stuff, but we’ll never release anything that makes you feel like you’re turning the screws, as you stated. Consumers must believe that it makes sense to them.”
To put it another way, if Netflix ever takes a firm position against password sharing, it’s unlikely to be a surprise to customers.
One of the more intriguing questions posed by analysts was whether there was a market or nation where password sharing was powerful. Netflix executive Greg Peters, on the other hand, didn’t offer much of a direct response.
Every market, every country is different, and so we see different ranges of behavior. And I think just how people orient themselves to the service is different from country to country. So I want to – it’s more than just sort of how they think about how maybe they are working the system or so forth, how did they think about sharing the service with an extended family or people that they love is a natural part of how they connect with the stories that we’re telling. So it’s all different around the planet, and it’s different within countries, too, as you might well expect.
Netflix password sharing isn’t going anywhere anytime soon. As a result, millions of Netflix subscribers will now breathe a sigh of relief.