Rachel Wenitsky is an obsessive rule follower, something she says she has been famous for her entire life. But there is one rule that she — along with at least 100 million other people — is perfectly comfortable ignoring: She shares passwords for streaming services with family members outside her home.
Streamers worry the end is coming for lax password-sharing rules
A crackdown on passwords hits a nerve for long-time streamers, and muddles the future of fragmented TV
June 22, 2022 at 7:00 a.m. EDT
After years of tacitly allowing password sharing, Netflix is cracking down on splitting a log-in with anyone who doesn’t live full time at the same address. For people like Wenitsky, a TV writer in Los Angeles, it’s a step too far.
“If the price to pay for having every streaming service is Netflix sending the full force of their security to my house to keep me from sharing my password with my mom, so be it,” Wenitsky says.
Netflix isn’t going door-to-door just yet, but it says it is coming after those who share passwords and is testing a program in Peru, Costa Rica and Chile to get people who borrow a password to pay for their own streaming. It’s the latest sign that the way we watch and pay for TV is at a crossroads. With inflation at a 40-year high and as global markets remain volatile and there’s talk of a recession, consumers are rethinking how much money they want to sink into subscriptions. The top eight streaming services would now cost nearly $60 a month combined if you had the most inexpensive version of each, inching close to what cable costs.
To cope, sharing passwords with friends and family has become a mainstream practice. At the same time, streaming companies are trying to compensate for their own financial struggles, with layoffs, price increases, more ad options or simply shutting down. The pandemic was a boon for the streaming companies, but now they have to compete with real-world activities again — box office hits are back, bars and parties are packed, and workers are returning to offices.
The result is an industry falling out of sync with how people use its products. It’s no longer just a cheaper, ad-free alternative to cable, but a crowded field. Netflix’s new zeal for password enforcement breaks the seal on something the streaming companies have long avoided: being clear about sharing policies and enforcement, leaving millions of TV fans confused.
“It feels like more of a structural thing these companies have to iron out, but don’t think it’s the responsibility of the consumer,” says Ned Riseley, an actor and singer in Brooklyn who sings a song about passwords with Wenitsky.
Sharing is already mainstream
For people like Ana Mardoll who have replaced cable with a delicate combination of TV streaming services they pay for, borrow or trade, the prospect of cracking down on sharing passwords hits a nerve.
“Look, everyone understands that everything costs more money these days. Server space, streaming costs, licensing; I didn’t complain when Netflix upped their prices,” Mardoll said. “But then they [Netflix] announced they’re going after sharing and I see them making the same bad assumption that companies always make: that every ‘shared’ household is a ‘lost sale.’”
Mardoll started off saving huge amounts of money by switching to streaming, but is now creeping toward having a cable-sized expense. He went from pricey satellite TV to Netflix DVDs by mail, then added in Prime Video, Disney Plus, Hulu and RiffTrax. He has been a paying Netflix customer since 2013, when a standard account cost $7.99 — now it’s $15.49. Mardoll shares the account with two other households that wouldn’t or couldn’t pay for it on their own.
Other companies have been mum about their next moves, but media industry experts predict they could follow Netflix’s lead.
“They thought there was endless growth but when everyone hits a wall, they’re going to follow the same Netflix playbook,” said Michael Nathanson, a senior research analyst at MoffettNathanson, an independent research firm based in New York. “They’re going to do the same thing.”
When they launch, streaming companies are focused on using those eyeballs — paid or unpaid — to spread the word about new shows, Nathanson said. The more word-of-mouth chatter a series gets, the more people will sign up to see what the fuss is about.
Sharing was OK, until it wasn’t
It makes sense that sharing feels OK to so many. The streaming companies have given account sharing a wink and a pass for years, if not outright encouraging it.
Last September, Hulu’s official Twitter account said: “Our love language is sharing a Hulu subscription.” Asked about the tweet, spokesperson Kristie Adler described the account as playful and said not all of the company’s social media posts are meant for literal interpretation.
Our love language is sharing a Hulu subscription.
— Hulu (@hulu) September 1, 2021
In 2015, Richard Plepler, then the CEO of HBO, said password sharing had no real effect on the business: “What we’re in the business of doing is building addicts, building video addicts.” At the CES in 2016, Netflix CEO Reed Hastings said the company “loved” that people share Netflix accounts and described it as “a positive thing, not a negative thing,” according to CNET.
Hulu, which is owned by Disney, says it has technology to flag suspicious activity, but it declined to provide specifics on what qualifies or what enforcement it uses. Other companies have similarly vague policies.
The lack of enforcement has, by design, created a culture of account sharing between close friends and family. It has also led to distant sharing between friends of friends, co-workers, exes, and Airbnb guests and hosts.
Sara from New York has been using the HBO Max log-in of a man she met on a dating app and only went out with once. She declined to use her last name out of fear of him changing his password. Another borrowed a streaming log-in from a friend while recovering from surgery and kept on using it.
“At one point during the pandemic we had a friend’s Criterion password,” said Riseley, the actor, who shares some of his own accounts with family members. “We watched two French movies, then it disappeared. That was an exciting one to have for a little bit.”
The risk of going after sharing
It’s not the insistence on keeping a subscription in the family that gets Ariane Broome-Hopkins — it’s the companies defining what a family is based on a primary address. “They can’t assume they understand the circumstances of this person’s situation because of the metadata on their phone,” said Broome-Hopkins, a 36-year-old customer care concierge. “Families aren’t as simple as they used to be.”
Broome-Hopkins’s partner is living in Austria, and she has close relatives and chosen family members scattered across the country and the world. For now, she’ll continue to share Apple TV Plus with her sister and her partner, borrow Netflix from her best friend, and share Disney Plus with a family with two kids who can’t afford it on their own.
Companies already have tools in place to limit the excessive usage that can come with an overused password. Some have a cap on the number of streams that can take place at a time, limits on the number of devices that can be logged in, and a set number of profiles. Few of the companies would say whether they already enforced sharing between people who know each other or if they planned to start.
While other streaming services are still staying tight-lipped, Netflix has been unusually open about its strategy. For example, Netflix is using IP addresses to determine what devices are connecting to its service and from what location. This is how the company already knows that 100 million people are watching on someone else’s account.
Streaming services may be embracing stricter rules or including more ad options in the hope of getting more paid subscribers, but it could also push people away.
“Netflix is the default. It’s there, it’s easy to use, it doesn’t cost that much. If you’re any less easy to use, if you’re any less there, I have other places to go,” said Adrienne Figus, a project manager in an academic library in Massachusetts, who once owned her own video rental store. “Purchase, borrow, library, pirate stuff — I could get it.”