Netflix is currently testing the feature that will ask its viewers to verify that they are sharing the household with the owner of the account. This move is expected to cause a clampdown on sharing the passwords.
A few of the Netflix users have received a message that asks them in order to confirm that they live with the account owner by entering details from a text message or email that is sent to the owner.
→ The video streaming service is sending messages that are meant to discourage password sharing.
→ Viewers will have to verify their account with a text or email code.
→ This comes weeks after Netflix raised its standard plan by $1 from $12.99 to $13.99 per month, whereas the premium tier was raised by $2 from $15.99 to $17.99.
→ The company’s steady stock price and the strong growth in subscribers have previously offset concerts about the lost revenue from the password sharing.
→ Netflix has topped the global subscribers with the user base of 200 million.
→ The platform is competing with the outbreak of new services of streaming platforms like Paramount, NBCUniversal, and HBO.
The message stated, ‘If you don’t live with the owner of this account, you need your own account to keep watching.’ The viewers can keep watching Netflix and delay the process of verification.
The message will keep appearing every time you open Netflix, but they will eventually be required to open a new account in order to continue the streaming.
A Netflix Spokesperson said ‘This test is designed to help ensure that people using Netflix accounts are authorized to do so.’
Netflix is the world’s largest streaming service that constantly tests new features with its users, and it is not clear if the household verification requirement will get implemented widely. The terms of service of Netflix states that the users of an account must live in the same household, though the company and other streaming services have declined to broadly crack down on sharing.
Netflix has ignored password sharing since strong growth in subscribers, and the company’s steady stock price have offset concerns about lost revenue. The site is now facing competition from the new streaming services that includes, Disney+, AT&T’s HBO Max and many others.
Magrid, a research firm, has determined about 33 percent of users of Netflix share the password with at least one person.
According to the company headquartered in Los Gatos, California, Netflix launches hundreds of tests yearly with select customers.
The trial is not expected to lead to a more extensive crackdown around the password sharing. This test could be applied to uses involving the account security in addition to password sharing policies. The co-founder and CEO of Netflix, Reed Hastings, addressed password sharing during their earnings webcast in the year 2016.
‘Password sharing is something you have to learn to live with, because there’s so much legitimate password sharing, like you are sharing with your spouse, with your kids,’ Hastings said. ‘So there’s no bright line, and we’re doing fine as is.’
A study conducted by Cordcutting.com in the year 2019 found that there were over 40 million accounts for major streaming systems that are ‘borrowed’ by non-paying users.
A portion of these users, though, said that they would pay for their own account if they lost access. This represented an estimate of more than $2.7 billion in potential revenue for the streaming services.
The move came after Netflix hiked their prices. Their standard plan went up by about $1 from $12.99 to $13.99 per month, and allows users to watch Netflix on two screens simultaneously. The price of the premium Ultra-HD tier was increased by $2, to $17.99 per month. The basic plan, though, remains unchanged, costing $8.99.
This hike was announced in October for their new subscribers. The existing one saw a rise in the fees in February.
This year Netflix announced that the company had topped 200 million global subscribers. Despite this, the shares have underperformed the S&P 500 index this year as investors moved away from growth stocks.