Netflix has officially begun its password-sharing crackdown. What you need to know

The days of sharing your Netflix password with anyone outside of your household are over.

On Tuesday, May 23, Netflix began sending emails to subscribers with an ominous opening line that read, “Your Netflix account is for you and the people you live with — your household.”

Netflix said it will gradually roll out the new rules by asking users to set up and approve which streaming devices are associated with their account, and connected to their home wifi.

While Netflix said they will not use location data to find out where someone might be watching from, they did note they will rely on IP addresses, device IDs, and account activity to determine if you’re watching from an approved screen.

The streaming giant said that unapproved devices will be prompted to buy a new membership. Account holders do have the option to transfer their profile to the user for access of add an extra member to their account for an additional $7.99 a month.

On Twitter, a person shared Netflix’s statement about their password-sharing policy.

Netflix’s new password policy comes after the company says it lost 200,000 subscribers in the first quarter of 2022 and said the millions of global households that share credentials are cutting into the company’s bottom line.

“The large number of households sharing accounts — combined with competition, is creating revenue growth headwinds. The big COVID boost to streaming obscured the picture until recently,” Netflix said in April 2022 when explaining the difficulties of signing up new customers, according to NBCNews.

After its subscriber loss, CNBC confirmed in May 2022 that Netflix laid off 150 employees.

“As we explained on earnings, our slowing revenue growth means we are also having to slow our cost growth as a company,” a representative from the company told CNBC. “So sadly, we are letting around 150 employees go today, mostly U.S.-based. 

In April 2023, Netflix announced that it had launched paid sharing in four countries, including Spain, Canada, New Zealand and Portugal, and were very “pleased with the results.”

But, according to Fortune, Netflix lost more than one million users in Spain after its crackdown.

Netflix logo on the side of the Netflix Tudum Theater in Los Angeles, CA.Patrick T. Fallon / AFP via Getty Images

Although Netflix noted that it will likely take a short-term financial hit as a result of the password-sharing crackdown, it said it still believes that paid-sharing is the right way to go, especially since it saw revenue growth in Canada.

“As with Latin America, we see a cancel reaction in each market when we announce (paid sharing plans), which impacts near-term member growth,” the company said. “But as borrowers start to activate their own accounts and existing members add ‘extra member’ accounts, we see increased acquisition and revenue.”

Following Netflix’s password crackdown, people took to Twitter to voice their frustrations.

One person said that no one will be “cool” with this.

Another joked that they would be officially saying “bye” to streamer.

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