Netflix’s password-sharing crackdown is still happening, but it’s not as egregious as initial reports suggested

New details about Netflix’s password-sharing crackdown were released on Tuesday with reports suggesting the end of times for families living in multiple households. As it went, anyone who lived outside the account’s main household (meaning any device not under the wifi or IP address associated with the main account) would be forced to pack their bags and create their own account. 

Within a matter of hours, Netflix clarified that the initiative was prematurely released on its Help Center page when it was only meant to apply to the countries Chile, Costa Rica, and Peru. Different rules would apply to counties like the United States, the United Kingdom, and Australia. However, the damage was done. Outlets such as The Streamable reported on the initial news and users flocked to Twitter to complain, threatening to leave the platform for good.

In order to not be axed from the account, the initial reports suggested that users would be required to “connect to the Wi-Fi at your primary location, open the Netflix app or website, and watch something at least once every 31 days.” For families with loved ones in the military, away at college, or traveling for long periods of time, this news was infuriating. All across social media, the complaints came rolling in. 

The real issue with the video posted by TikTok user @beadsook is Netflix’s customer service agent trying to define a household “as people who live together in the same location.” As is evident by those serving in the military, for example, that is not always the case. 

Indeed, Netflix’s new password-sharing policy does push those “who do not live in your household” to pay for their own Netflix account, according to its Help Center page. However, it doesn’t plan to steamroll that initiative in the way you might think.

Instead, Netflix will allow people to use a 4-digit passcode to verify a device outside of the main household. When a device “outside of your household” tries to log into the account, it will be prompted to “verify that device before it can be used to watch Netflix,” according to the Help Center page associated with the US, UK, and AUS, among other countries.  

Over 100 million households participate in password sharing, according to Netflix. According to the company’s letter to shareholders, this new password-sharing initiative is in an effort to remedy the “tough year” that was 2022. After losing nearly one million subscribers, the company was saved by the penultimate season of Stranger Things and believes it now has a “clear path to reaccelerate our revenue growth.”

Ad-supported tiers – a first in the company’s 15-year history – and its new password-sharing crackdown are just a couple of the ways Netflix plans to stem its hemorrhaging of subscribers. Whether or not it’ll pay off is yet to be seen.