For years, one of the most popular things about Netflix was that the company took a very relaxed approach to people who share their accounts with family or friends. To be completely fair, it's not a "feature" in the sense that it was something Netflix designed or marketed. Still, for many people, it seems like it is because it's been around so long.
If you know your users are doing something and you do nothing to stop it for a decade, it starts to feel like it's a generally accepted practice, if not an actual feature. That's kind of what password sharing has been like on Netflix.
Now, however, Netflix is doing something. Users who log in to Netflix outside of the home of the account owner will get the message "If you don't live with the owner of this account, you need your own account to keep watching." Netflix will then prompt you to enter a code sent to the account owner via email or text, similar to two-factor authentication.
Netflix told The Streamable, which first reported on the test, that it was "designed to help ensure that people using Netflix accounts are authorized to do so." According to research firm Magid, as many as a third of all Netflix users share their account passwords. Considering that the most popular streaming service just passed 200 million users in January, that's a lot of sharing.
That doesn't mean there's something nefarious going on. It's not uncommon for a student to head off to college with Mom and Dad's password to keep binge-watching Stranger Things or The Queen's Gambit.
Still, just because Netflix has historically turned a blind eye to password sharing, it doesn't mean it's right. It's also no guarantee that it always will. In the past, Netflix's position was almost a form of goodwill in itself. Compared with other services, Netflix was downright generous.
Xfinity, for example, will only allow you to stream its live TV service if your device is connected to the cable router provided by--that's right--Xfinity. You can't watch it on your smartphone outside of your home even if you are the account owner.
According to CNBC, Netflix said that the current notification is a test. That means there's no guarantee the company's crackdown will become more widespread. There are two things about this that I think are worth mentioning.
The first is that, just like Netflix's position on password sharing in the first place, the company's approach here is very relaxed. The notification doesn't seem especially difficult to bypass, since if your brother gave you his Netflix password, there's a good chance he'll be willing to pass along the verification code as well.
Then again, when faced with that screen, which for now apparently only appears on TV devices (as opposed to on your smartphone, for example), it seems likely that some number of people will feel enough guilt to sign up.
Which is the obvious reason Netflix would want to do this. Out of 200 million users, a third is around 67 million people who aren't yet paying for their own account.
Sure, some people are going to be mad that Netflix has made an effort to crack down on what might be their favorite feature, but you can hardly blame the company. I would argue that the fact Netflix has taken this approach means it might actually earn a little goodwill. It isn't trying to force users or make it impossible. Instead, it's just reminding people that "hey, it would be really nice if you'd think about signing up."
If even a third of those feel convicted when they see that message, that's would represent a 10 percent growth in users. I have no idea how many people are seeing the message, or how many are converting, but the numbers are certainly in Netflix's favor.