Netflix to implement strict measures as it pulls the plug on password sharing; Know more

In its most recent effort to increase the number of subscribers to its video streaming service as its growth slows, Netflix on Tuesday, May 23 laid out how it plans to crack down on the widespread sharing of account passwords in the United States. Netflix has announced that it will only allow members of the same household to watch its programming, and this not just in the United States but in 100 other countries, in order to prevent password sharing.

Netflix's standard or premium subscriptions, which range in price from $15.50 to $20 per month, include the option to share your password with someone who lives outside your home for an additional $8 per month, a $2 savings over the basic package. 

Netflix promised that everyone living in the same household as a US customer will still be able to access TV shows and films "wherever they are — at home, on the go, on holiday," without going into specifics on how it authenticates user identities or accounts. The Los Gatos, California-based business has around 70 million American customers.

100 million users used shared passwords

The long-awaited action, which Netflix hinted at nearly a year ago, aims to put a stop to a practice that the business tolerated for years while its streaming service was luring members in droves. Management had little motive at the time to risk upsetting customers by limiting password sharing.

An estimated 100 million users worldwide were obtaining passwords from friends and relatives in order to stream free Netflix TV shows like "The Crown" and films like "All Quiet On The Western Front." These credentials were distributed through Netflix's 232.5 million paid users globally, who made up the majority of the $32 billion in revenue the firm brought in last year.

Netflix has added nine million customers globally

But Netflix is being tough following a year of mediocre subscription growth, which saw its biggest customer losses in more than a decade. Following similar actions in Latin America, it started restricting freeloading viewers in February in Canada, New Zealand, Portugal, and Spain. Prior to the crackdown on password sharing, Netflix started offering options, like the capacity to transfer the profiles created on subscriber accounts to make it simpler for users to keep their viewing habits once they can no longer watch episodes for free.

In an effort to get more of its users to pay for access to its content, Netflix recently introduced a $7 monthly plan that for the first time included advertising in its service. Since the launch of the ad-supported option, Netflix has added 9 million new customers globally, albeit not all of them choose the inexpensive package.

(With PTI and AP Inputs)