[Photo Credit: Joon Park]

The streaming giant Netflix has finally begun its long-awaited crackdown on password sharing in the United States and the United Kingdom.

In light of waning interest in the streaming platform, this move was an effort to increase subscriptions and profit.

However, this also implies there needs to be significant changes for  users of other people's accounts as well as the account owners and the way they utilize the site.

Netflix sent out a mass email to U.S. and U.K. users who are sharing their account with people living outside their home informing them that the company would start kicking people off the service if they were using another user’s account for more than 30 days while at a different location.

The company announced it would charge an additional $7.99 per person for homes wanting to pay for an additional user in order to have access to their membership.

With the new modifications, Netflix will employ a number of methods to identify instances where users are accessing another household's account and to stop them from doing so. 

A variety of techniques will be used in this identification process, but the main focus is on looking up a device's IP address to see if its usage patterns indicate it is not abiding by the rules.

The news was expected as Netflix announced its first subscriber loss in ten years in April of 2022 and attributed this decline to shifting economic conditions as well as heightened competition from alternative streaming providers.

At the time, it stated that it would explore measures to boost revenue, such as introducing a more affordable ad tier and putting a stop to household password sharing. 

According to Netflix, 100 million users globally use their streaming service without having to pay for it. 

As time passes, Netflix expects that some users who have been sharing accounts in the past may eventually cancel their subscriptions. 

However, studies indicate that many of these individuals return, and generally, this results in more individuals paying for memberships.

Currently, Netflix has a range of pricing options, ranging from $6.99 per month for an ad-supported version to $19.99 per month for a version without advertisements and allowing customers to add two new members for a fee of $7.99 per month, per person.

Some Netflix users have expressed their discontent with the company’s new approach on Twitter, pointing out that the business has long encouraged consumers to share their password with others.

However, that was a different era- when Netflix ruled as the sole streaming option available. 

Consumers now have access to a wide range of options, including Disney+, HBO Max, Peacock, Paramount+, and many more. 

Additionally, Netflix's efforts to increase revenue per user come at a time when many consumers are struggling financially due to inflation.

Some well-known writers urged customers to cancel their Netflix accounts in support of the writers because the new policy went into effect during the Hollywood writers' strike.

Users’ unhappiness with the password crackdown was not unexpected as Netflix has spent the last year testing the concept in smaller markets like Canada, New Zealand, Spain, and Portugal. 

According to the company's most recent letter to shareholders, limiting passwords initially causes a cancel reaction in each market which is followed by increased revenue once the borrowers activate their own accounts.