SAN FRANCISCO — Netflix is testing a new pop-up message that warns people who are sharing a password — and don’t live with the password holder — that they need to pony up and pay for their own account.
Password sharing is incredibly popular on Netflix and other streaming sites, where people might piece together a portfolio of streaming subscriptions by sharing passwords with their parent, ex-partner, friend or college roommate’s dad’s cousin. Restricting people from sharing passwords could force some to pay for their own accounts — but it also might drive others to simply give up on Netflix and turn to one of the other myriad streaming options.
Streaming services have boomed in popularity during the pandemic, as people spend more time working and hanging out at home — and watching hours of “Emily in Paris” or perhaps “Bridgerton,” two runaway hits from Netflix in the past year.
Netflix said in its last quarterly earnings report that it now has more than 200 million subscribers. At the beginning of the pandemic, it gained 16 million subscribers in the quarter ending in March and another 10 million in the next period. Its growth slowed somewhat as coronavirus restrictions lifted around the country.
But the company is also facing steep competition from the streaming strongholds of Hulu, HBO Max, Amazon Prime Video and newer entrants like NBC’s Peacock and Disney Plus. That could be driving some of its desire to crack down on sharing passwords.
“This test is designed to help ensure that people using Netflix accounts are authorized to do so,” Netflix spokesperson Ebony Turner said in a statement. The company did not answer questions about the size of the test or if the company would adopt it more widely.
Netflix’s terms of service state that accounts are for personal use and “may not be shared with individuals beyond your household.” The streaming giant has tiered price options that allow customers to stream on one, two or four screens at once.
Netflix hasn’t seemed especially keen to restrict password sharing in the past. On an earnings call in 2019, Chief Operating Officer Greg Peters acknowledged that the company was monitoring the issue.
“We’ll see, again, those consumer-friendly ways to push on the edges of that,” he said. “But I think we’ve got no big plans to announce at this point in time in terms of doing something differently there.”
The current test appears to ask users to verify that they are the account holder (or a member using the same password) by asking them to enter a verification code that can be texted or emailed to them. But there also seems to be a way to “verify later,” or ignore the prompt.
For now, at least, the test seems to be limited and no one is in imminent danger of losing their entertainment access.