Netflix Password-Sharing Crackdown Finally Rolls Out In The US. Check New Rules

It's been a while since Netflix's informed its customers that their password-sharing days were soon coming to an end. Now, Netflix has updated its password-sharing policy that says that accounts are only to be shared in a single household.

"Your Netflix account is for you and the people you live with — your household," the company said in an email, which it posted to its blog Tuesday.

The email says that the members can transfer a profile of someone outside their household so the person can begin a new membership that they will have to pay on their own. If not adhered to the following guidelines, then the account will be charged $7.99 a month per person outside of their household using their account. 

Netflix and Its Password Sharing 

Netflix said that it has been tightening its guidelines on password sharing in an attempt to boost its revenue as well as its subscriber numbers. Originally the decision was expected to be executed on people who borrow others' accounts to create their profiles in the first quarter of this year. However, it was pushed to the later quarter of the year following an investor meeting.

Earlier this year, Netflix rolled out password-sharing guidance in four other countries -- New Zealand, Canada, Portugal, and Spain. In these domains, Netflix said that it would ask members of the countries to set a "primary location" for their accounts. Netflix began sending emails to customers in 103 countries and territories on Tuesday.

In the latest notice issued by Netflix, the company did not provide any specific details about the US households and rather gave the two options of either transferring a profile or paying for the extra member. 

According to CNBC, the company said that it saw cancellations after the news was announced, affecting its near-term growth.  However, they found that these password borrowers later activated their accounts and also added existing members as extra member accounts. As a result, the company saw a growth in its revenue.

In other streaming news, Warner Bros relaunched their streaming service called Max, which will be a combination of HBO Max and Discovery+ services.

On the other hand, Paramount Global launched its Paramount+ with the Showtime combined app that will be available in June.

Netflix's Secret Sauce To Success

There is no doubt that the pandemic gave the streaming service a huge boost as demand for OTT content soared. According to BBC, the company now has more than 200 million paid subscribers which is 30% more compared to 2019. Netflix has taken a huge debt to fuel its expansion, as per the publication.

Another reason behind their success lies in their efforts to constantly push national barriers. Netflix said that their French Language show Lupin, which revolves around a gentleman burglar, shot to the number one spot in Brazil, Argentina, Germany, Italy, and Spain. Netflix is also known to be very keen on learning how its competitors function. 

"The big growth in streaming entertainment has led legacy competitors... to compete with us in new ways, which we've been expecting for many years," Netflix said in its investor note.

"This is, in part, why we have been moving so quickly to grow and further strengthen our original content library across a wide range of genres and nations."

Challenges Netflix Might Face In The Future

Paolo Pescatore, a tech analyst at the PP Foresight, said an "intense battle" lies ahead between Netflix and other streaming platforms, "Netflix has far more to lose given its huge base while rivals are only starting to get going. Originals will be a key differentiator," he said.

"There will be casualties. Viewers will have to make tough choices as they can't afford all of the streaming services including those for music and games."