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The world’s largest streaming service has introduced new password sharing limitations in an effort to crackdown on customers who are using–but not paying for–a Netflix account.
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Customers in 103 countries and territories—including the United States, Britain, Australia, France, Germany and Brazil—are only allowed to share their Netflix in one household. Paying customers can add a member outside of their homes for an additional fee. In Australia, the fee is $7.99 per month.
In 2022, Netflix shocked many investors when it recorded a drop of some 200,000 subscribers. Some $US54 billion was wiped off its value and by September of that year, Netflix shares were down by 62% compared with the year prior, prompting many to wonder if Netflix’s golden era as the undisputed leader in streaming was over.
Netflix responded with bullish plans to shore up its revenue base through advertising and—you guessed it—cracking down on password sharing by converting lurkers and freeloaders into paid subscribers.
The changes came into effect in May last year in Australia, but if you’re just coming across them now, here’s what they mean and why they were introduced.
What do Netflix’s Rules Mean for Australian Users?
How Netflix’s password sharing rules affect you depends on what type of Netflix user you are.
If you’re a Netflix account owner, you’ll be asked to set a primary location for your account–being your house. This then means that anyone who lives in the household will be able to use the service, and your own accessibility will not be affected.
If you’re using the Netflix account of someone you don’t live with, you’ll no longer be able to access the service. Instead, if you try to, you’ll be asked to create your own account, or join someone else’s using paid sharing.
It’s Called ‘Paid sharing’
Paid sharing is Netflix’s solution to letting people outside of the primary household still use the account–by charging a fee. So, if you’re a generous account owner who wishes to continue sharing your account, you’ll need to add a sub-account at an additional cost of $7.99 AUD to your monthly subscription.
However, you will only be able to add up to two ‘sub accounts’ on each paid primary account.
Has the Crackdown Been Successful?
While many subscribers were annoyed by the new rules, Netflix has appeared to have weathered the storm—and come out remarkably well the other side. In its first earnings report after the crackdown was introduced, it announced a 6% jump in subscriptions that was partly driven by the password-sharing crackdown.
In its most recent second quarter revenue update for 2024, Netflix revenue came in at $US9.56 billion, which was up 17% on the same period last year. Net income, or overall profit, jumped 44% to $US2.15 billion. The streamer’s global paid memberships rose a staggering 16.5% to $278 million, which has helped re-cement its position as the leading streamer of choice, both in Australia and across the globe.
How Does Netflix Detect Password Sharing?
Netflix is able to use information such as IP addresses, device IDs and account activity to detect whether devices are being used within the same household.
If it finds an issue with any device using a single account, Netflix says the account holder will be notified.
“When a device outside of your household signs in to an account or is used persistently, we may ask you to verify that device before it can be used to watch Netflix or switch your Netflix household,” the company said.
Related: Best VPNs For Australians
Featured Partners
1
Nord VPN
Number of Servers
5,500
No of Server Locations
59
Max No. of Devices
6
2
Private Internet Access (PIA)
Price
Starting From $2.89 AUD Per Month
Devices
Unlimited
Support
24/7
3
Surfshark
Plan costs
Starting from $3.56 per month
Number of servers
3200+
Encryption
AES with 256-bit keys
Frequently Asked Questions (FAQs)
Why did Netflix change its password sharing rules?
Netflix has never allowed password sharing. While previously the company looked the other way, it began its crack-down to improve its “long-term ability to invest in and improve Netflix” and to build its business. For most of 2022, Netflix struggled to maintain its previous pace of growth, and introduced a cheaper subscription tier with paid advertising, as well as the password changes, to re-establish its dominance.
By the end of 2022, the company had already begun to reverse its loss of subscribers, and as of May of 2023 shares were at $US355. Eighteen months later, shares have now reached $US701.92 as of October 8, 2024.
Will I lose my watch history if I make a new Netflix account?
No, you won’t. If you have to start your own membership, or join someone else’s account as a sub account, Netflix says you’ll be able to transfer your entire profile, including your watchlist, streaming history and more.
When will Netflix’s password rule be introduced into Australia?
The new rules were introduced into Australia on May 24, 2023. They were originally supposed to be introduced in March of that year, but the company delayed the widespread roll-out due to some subscriber kick-back.
Do the Netflix password changes mean I can no longer use my ex's account?
Most likely yes. Unless you have a really strong relationship with your ex, and he or she is happy for you to be added as one of their limited sub-accounts (which cost extra), then your days as a Netflix freeloader may well and truly be over.
