How the end of Netflix password sharing will change the way families watch – NBC Chicago
- The streaming entertainment giant’s long-awaited attempt to limit password sharing is coming in March.
- Although the details have been closely watched, an update to the FAQ page this week, since removed by Netflix, suggested how it plans to identify account sharing abuse.
- College students’ use of family home connections may be among the targets.
- When trialed in Peru, Costa Rica, and Chile, an additional $2.99 per month plan can cover up to two friends not living with the subscriber.
Is sharing a Netflix password a cybercrime?
That will soon become, for the most part, a thing of the past if the world’s biggest streaming service has its way. After experimenting with a plan to crack down on password sharing in Latin America, Netflix will launch the US version of this subscription ID tracking technology in March, but has been silent on the details of how it will work. That is, until earlier this week, when a Netflix FAQ page change picked up by the press stated that any user watching from an account’s “non-primary location” could receive a code. temporary to verify usage up to a maximum of seven days – to cover legitimate account user travel. But that FAQ page was later updated again to remove those details and the company told The Streamable, the first to identify the FAQ change, that it was a mistake and still only applied. to Latin American countries where Netflix has piloted the approach.
Whatever the truth in the US market, what’s at stake is the future of the more than 100 million households the company says share passwords, more than 40% of the 231 million paid subscriptions of the company. And beyond that, how all the media companies migrating the latest generation of linear cable subscriptions to the internet are managing a financial environment in which there is a more pressing need to generate returns on the high costs of streaming. Gone are the days of Netflix’s Twitter account and former HBO chief Richard Plepler claiming that a media company’s primary goal was to get people “addicted” to streaming. In 2014, allowing people to share passwords was a “great marketing vehicle for the next generation of viewers,” Plepler told BuzzFeed. A decade later, the time has come for the next generation to pay.
And yes, it looks like the crackdown may include families sharing passwords with kids who are in college.
Netflix’s terms of service limit sharing passwords to people who live together in the same place, saying college kids may not be allowed. There’s a tricky point here: College students often don’t change their permanent address until after they graduate. Even two analysts who follow Netflix have acknowledged that their college-aged kids are piggybacking on the Netflix family account at the moment.
“I have a daughter in college in Florida who uses a TV to watch – it will cost, I’m guessing, an extra $5 a month,” said Rich Greenfield, who follows Netflix for LightShed Partners. “If she was only watching on a laptop or phone, I suspect there would be no additional cost. I suspect most parents will bear the additional cost. While friends and extended family will have to set up their own accounts .”
“Almost everyone I know who shares a password is with their family,” said Wedbush analyst Michael Pachter. “My kids are in college, so it’s legit. I support them. She’s part of my home. The day [my daughter] is alone, she can get her own password.”
During testing in Chile, Costa Rica, and Peru, Netflix uses information such as IP addresses, device IDs, and account activity of devices logged into the Netflix account to identify persistent sharing outside of a foyer. The company’s terms of service already require customers to agree to Netflix tracking this information in order to provide the service.
In the United States, where subscribers are allowed to use their subscriptions while traveling, the service already uses similar methods to ask if subscribers connecting from hotels or Airbnbs are who they say they are. In such cases, the company will send the primary account holder a code that must be entered in order to proceed, as explained on the since-removed FAQ page, with the maximum period for requesting the temporary code being set at seven days.
The quick fix for this, for many password sharers, is a quick text string from the subscriber to the friend or child using the account. The child tells mom and dad that they are about to log in, Netflix sends the code to the primary account holder, and the parents send it to the child, who enters it. Pachter said in an interview before the FAQ page was updated and removed that Netflix could restrict this by placing a short time limit on how quickly someone trying to access the service could respond to effort. ‘authentication. But the FAQ suggested that the biggest delay may be related to the maximum number of days it can work.
Greenfield, more so than Pachter, said he expected Netflix to crack down on college-age shared password users. Netflix may use the college market as a key target for an additional user plan, which adds $2.99 per month to bills and is now offered in Costa Rica, Peru, and Chile for customers who want to add up to two friends or family members who do not live with them on their own.
The result could look like how Spotify works, where cheap add-on packages are available, or the next package could look like mobile phone plans that allow friends and family to bundle lines in exchange for lower rates.
“I don’t think I would pay $15 each,” Pachter said, but he could absorb a lower rate in the family package. “I would tell them to sort it out with your roommate. But I’m not going to pay $16.99 [for the family]. What am I going to do – save $4?”
The company should leave students alone, Pachter said, and work to get them to enroll independently after graduation.
Pachter is also not a fan of the plan as it was briefly revealed, which he says overlooks details about how many families use Netflix. The leaked method included a 31-day delay for any device not connected to a primary location’s home network. But in one’s own home, for example, the little-used TVs in many rooms can be challenged when guests or kids returning from college try to hook them up.
“When Netflix blocks access to these devices in one place, it’s going to annoy me,” Pachter said. “Also, this plan can backfire on paying customers who don’t use the service for a few months. They might get stuck and decide it’s easier to quit.”
In Latin America, users in countries where the Password Sharing app is being tested and who are not eligible to be added as an additional member on an existing account can get theirs for $8.99 per month. In the US, the cheapest option is the Basic with Ads plan, introduced in November, at $6.99 per month. The ad-supported plan is not yet available in Peru, Costa Rica, or Chile.
Netflix this week announced several improvements to its premium plan related to audio quality and download permissions on more devices.
Netflix’s plan will likely include inexpensive options to appeal to consumers who need “a little push” to set up their own account, co-chief executive Greg Peters said on a January 19 conference call. .
“Part of it is what we call casual sharing, which is people can pay, but, you know, they don’t need to,” Peters said. “And so, they’re borrowing someone’s account.”