Here’s how Netflix’s crackdown on account sharing will affect you, and what you can do

You may recall that Netflix is finally taking a hard-line approach on people sharing their accounts with others who don’t live with them. The company is already testing anti-sharing mechanisms in some countries, and now that there’s a new localised FAQ page for Malta, we could be next.

How will Netflix enforce this?

If you and your best friend are sharing a standard account which allows you to watch from two screens at the same time, then you’re out of luck, unless you live in the same household.

It appears that Netflix intends to track not just IP addresses, but also device IDs and activity of devices signed into the account.

If someone tries to log in to Netflix from outside the household, then they’ll have to verify their account to prove they are from that household. Netflix will send a four-digit code to the email or phone number associated with the Netflix account, which needs to be entered by the person trying to log in.

This may happen fairly regularly if someone’s using Netflix from outside the household.

What can customers who share accounts do?

There are two solutions. First, they simply make a new account. Netflix intends to introduce a mechanism to allow Netflix profiles to be transferred between accounts. That way if you start a new account you can import your watch list and ratings to that account without having to start from scratch.

The other solution is something which is still in the works at Netflix. The company intends to create a ‘paid-sharing’ option, which will inevitably be more expensive than what you’d be paying now. However, it will allow you to keep using the account as is.

Others may try to see to what extent they can play around with the limits placed by Netflix’s verification process, but it’s likely that as time goes by it will become more difficult to fool the system.

Why is Netflix doing this?

It appears that Netflix went into overdrive after being labelled as the worst-performing stock in April 2022. That month the company announced that it lost subscribers for the first time in 10 years, sending the stock plunging by more than 35 per cent in a day.

Since then it announced the introduction of an advertising-supported payment tier, which would be cheaper than current tiers, and also a clampdown on account sharing. The company claims that over 100 million households engage in the practice, meaning there is a lot of room for revenue and subscriber growth optimisation.

The move risks pushing people away from the streaming service now that it has become a highly competitive space, with Disney+ and Amazon Prime among others in the market. However, time will tell how many will actually move.

The company declared that during last three months of 2022, the number of subscribers grew by 7.7 million, reaching 231 million subscribers, beating expectations. Following the publication of the numbers, co-founder and CEO Reed Hastings stepped down from the company, letting co-CEOs Greg Peters and Ted Sarandos take the reins.