Netflix is cracking down on password sharing in South Africa and discontinuing the option to add extra members to accounts at reduced fees, according to a shareholder letter accompanying the company’s second-quarter results in 2023.
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The policy change has proven successful, with increased revenue in regions where accounts were limited to single households, and a significant addition of 5.9 million paying customers between April and June 2023.
Data collected by Antenna also indicated positive results in the US, where Netflix experienced its four biggest single days of sign-ups in at least four and a half years.
To enforce the password crackdown, Netflix uses a combination of IP addresses, device IDs, and account activity to identify the primary household location. If it detects account usage in another location, users receive a notification to set their primary location.
While Netflix was initially expected to launch an extra member feature in South Africa, the shareholders’ letter revealed otherwise. Instead, the company will start addressing account sharing between households in almost all countries that do not yet have the policy in place, beginning on July 19, 2023. In these markets, Netflix will not offer an extra member option.
The streaming service noted that it recently reduced prices in many of these countries, where Netflix adoption remains relatively low, and therefore, adding the extra member feature could create unnecessary complexity.
It’s essential to clarify that users residing in the same household can still share the same Netflix account while traveling. For this to work, “trusted” devices must connect to the same Internet connection used by the primary household for Netflix and stream content at least once every 31 days. On the other hand, “untrusted” devices logging into the Netflix account will require entering a code sent to the account holder. They can then use Netflix for seven days before being prompted for a new code.
