Netflix braces for cancellations as it begins crackdown on password sharing

“A Netflix account is meant to be shared in one household.”

That line of text, which was recently spotted on the Netflix Help Center, represents the dawn of a new era for the streamer. The company that once compared password sharing to love is now cracking down on that practice in four countries.

Netflix has long telegraphed its plan to limit password sharing, despite the popularity of that practice. The crackdown was first tested in Latin America last year, and it has now made its way to Canada, New Zealand, Portugal, and Spain. We still don’t know when exactly this policy will hit the United States, but recent reports suggest Netflix will start policing its American subscribers before the end of Q1.

The change has already drawn criticism on social media, but Netflix is attempting to soften the blow by equipping affected subscribers with new controls. In a blog post, Netflix Director of Product Innovation Chengyi Long announced a new Manage Access and Devices page, as well as a feature that lets users transfer their existing profiles to new accounts. “Today, over 100 million households are sharing accounts,” Long wrote, “impacting our ability to invest in great new TV and films.”

Long also noted that Netflix subscribers will be able to add out-of-household profiles for an additional fee. The price of that transaction varies by region, ranging as low as €3.99 in Portugal and as high as CAD 7.99 in Canada.

Greg Peters (pictured above), who took over as one of Netflix’s co-CEOs in January, has acknowledged that the incoming crackdown will not be “universally popular.” He warned investors that Netflix will lose some subscribers as a result of its policy shift, though the company expects to recoup those losses.

Peters and co-leader Ted Sarandos will now deal with the fallout from the controversial decision. If Netflix is able to enact its new policy without a significant subscriber drop, then other streamers could follow suit (and Netflix’s cheaper, ad-supported tier might experience a wave of new signups).

On the other hand, if the criticism proves too loud to ignore, Netflix’s prolonged malaise will continue. During the company’s Q1 2022 earnings call, former CEO Reed Hastings admitted that pandemic-era growth had obscured the severity of the password-sharing problem. A year later, it’s time to find out if he was right.