The video streaming giant Netflix has finally outlined some of the measures it is taking to stop, or at least reduce, password sharing.
According to a set of new guidelines added to the Netflix Help Center, it appears that the platform will only allow devices that are connected to the same network as the primary device to access a Netflix account.
This should supposedly limit the number of people using a single account to one household. Unregistered devices that attempt to log into the account without being connected to the registered internet network will be automatically blocked.
However, there will be some exceptions to this rule. For example, if one household member is traveling, the primary account will be able to verify the remote connection so the service can be enjoyed despite being far from home. Netflix (NFLX) did not clarify how many times a primary device will be able to verify a remote connection.
Netflix Has Tried Out Different Arrangements to Crack Down on Password-Sharing
The company has been cautiously attempting to reduce password-sharing as a way to increase revenue and subscriber growth as it estimates that over 100 million users use a third-party account to access the problem.
To prevent an exodus of users once the measures are rolled out, Netflix recently revealed a new subscription package called “Basic with Ads” that costs $6.99 per month and supports 1 registered device. This plan is currently available in a selected number of countries including Brazil, the US, and the United Kingdom. However, the firm should soon make it accessible to users worldwide.
Netflix’s current subscription packages allow for up to 4 devices to be connected at the same time. It is unclear if the firm plans to launch a plan that permits a higher number of registered devices. For now, the company has been charging extra fees for any additional members that use a single account beyond the plan’s maximum limit.
These new guidelines are coming out shortly after the departure of the firm’s long-tenured co-CEO, Reed Hastings, who left his post to be succeeded by Greg Peters.
Competition in the Streaming Space Keeps Heating Up
Aside from cracking down on password-sharing, Netflix has also been improving its content offering lately to attract more users.
It recently launched mobile games that can be accessed offline while it should soon start receiving advertising revenues that should at some point offset the negative price difference of the Basic with Ads package. The ads platform will be managed by Microsoft (MSFT).
Competition in the video streaming space has been heating up as top competitors have been joining the space including Amazon (AMZN) and Apple (AAPL). Netflix’s top competitive advantage and one of the strengths of its business model – its original content – is now a norm in the sector as many of these companies are also producing their own TV series and movies.
For consumers, the problem lies in the many options that are now on the table and their combined cost compared to signing up with cable service. Staying competitive and at the top of consumers’ priorities in terms of the subscription services they are willing to pay is key to the long term success of both Netflix and its rival platforms.
In mid-January, Netflix reported a surprising jump in its number of paid subscribers after two consecutive quarterly drops.
It appears that the latest measures adopted by the firm are working to lure more users to their platform. However, it remains to be seen if cracking down on password sharing will have some unintended consequences such as a drop in the time spent by users watching content.
With a user base that’s getting close to 300 million, Netflix may soon have to explore further initiatives to grow its top line that does not depend on subscriber growth as its user base is getting too big to keep growing at a fast pace.
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