Netflix tests clampdown on password sharing

Posted:
in General Discussion edited March 2021
Netflix might soon take an uncompromising position on password sharing, as the company this week began to test a verification system designed to dissuade the common practice.

Netflix Password Sharing
Source: The Streamable


A select number of subscribers this week were met with a prompt reading, "If you don't live with the owner of this account, you need your own account to keep watching," reports The Streamable. Users were then asked to verify their account by entering a generated code sent via email or text.

"This test is designed to help ensure that people using Netflix accounts are authorized to do so," a Netflix representative told the publication.

It is unclear how Netflix is monitoring password usage, though an easy route would be IP address tracking.

The test is reportedly limited to customers accessing the service through smart TVs, though testing could expand at a later date and become standard policy. Alternatively, nothing might come of the test, as the company told CNBC it conducts "hundreds" of similar trials each year.

According to research firm Magid, about 33% of Netflix users share their password with at least one other person, CNBC reports. The practice leads to lost revenue for Netflix, though the firm has done little to thwart freeloaders in the past.

Netflix's basic $8.99-a-month price tier limits streaming to one screen, while the step-up $13.99 tier allows for shows to be streamed to two screens simultaneously. The service's terms and conditions restrict credential sharing to members of a single household.

Greg Peters, Netflix's chief product officer, in an interview with The Wall Street Journal in 2019 said the company monitors password sharing but had no plans to take action against those who access the service without authorization.

Comments

  • Reply 1 of 20
    zeus423zeus423 Posts: 148member
    I can see a few problems with basing this on IP address tracking. My Netflix account allows me to watch on two devices at the same time. Let's say I'm watching from home but my wife wants to watch while she's at work (during lunch, of course). Or perhaps I go on vacation and want to watch Netflix while falling asleep on the beach? How about students who go to college and log in via their parents' account? They are in the same family and should be able to use the same account, but the IP addresses would be vastly different. Hopefully Netflix does some pretty thorough testing before rolling this out to the masses.
    manfred zornnapoleon_phoneapartroundaboutnowdavgregfred1anantksundaramwatto_cobra
  • Reply 2 of 20
    davidwdavidw Posts: 1,567member
    zeus423 said:
    I can see a few problems with basing this on IP address tracking. My Netflix account allows me to watch on two devices at the same time. Let's say I'm watching from home but my wife wants to watch while she's at work (during lunch, of course). Or perhaps I go on vacation and want to watch Netflix while falling asleep on the beach? How about students who go to college and log in via their parents' account? They are in the same family and should be able to use the same account, but the IP addresses would be vastly different. Hopefully Netflix does some pretty thorough testing before rolling this out to the masses.
    Right now, none of those are issues. 

    For one, a Netflix account is for a household, not its family members. So any family member not living in your household is not entitled to use your account in their household. This is not like a family account for streaming music. So using an IP address would work here. 

    Plus, as mentioned in another article about this, for now, this IP sharing crackdown only applies to TV boxes, Smart TV's and maybe smart Bluray players and game consoles. So far it doesn't apply too mobile devices like phones and tablets. So unless you and your wife travel with your flat screen TV, TV box, Bluray player or game console, it doesn't matter what IP address you're using if watching your Netflix account while traveling with a phone or tablet. So theoretically, a kid in college could log into their parents Netflix account with an iPad or iPhone and stream it to a TV with AirPlay, and not be affected. For now anyways.  (But I do remember a while back an issue with Netflix not supporting AirPlay unless they were given info about the TV that was being used. Maybe related?) 

    One of the way Netflix can make this work is to monitor how often you're using a different iP address to log in with a TV, TV box, Blurry player or game console. If only occasionally, then its not a problem. As you might be just be visiting another household and want to watch a movie there, using your Netflix account. Just be sure to log out when you leave.

    Though I do know a few friends that would bring their Apple TV to another friends home so they can use it there to rent a movie on iTunes or use an app to watch some sport game that they subscribe to. But they don't leave the Apple TV there when they leave and this way, they don't have to log into any of their accounts on someone else's TV.

    I have purchased many used Bluray players and Wii game consoles from Goodwill, where when I get them home to test, they still had someone Netflix account on it and was able to log in once connected to my WiFi. Many people just don't remember that they have to make sure to log out of their Netflix (and others) account, before giving their Wii or BluRay player away. Devices like these remember your account log ins, so you don't have to log in every time.  
    viclauyyc
  • Reply 3 of 20
    EsquireCatsEsquireCats Posts: 1,243member
    If they wanted it to be this way they should have enforced it from the very beginning. The practice is now common and likely has helped Netflix’s penetration. When advertising by the number of screens it’s not unreasonable for the consumer to assume this means their second screen is for another personal contact who is not necessarily in the same household.

    Eg How annoying will it be for couples that don’t live together, having to text each other codes back and forth each time one dares to use the service as advertised.

    As online services begin to feel the squeeze but wish to continue ever growing revenue, I’m beginning to hate all the subtle ways that the services progressively become worse. Eg by festering them with advertising, adding pay-per-view specials, reducing their catalogues or cutting off common usage scenarios like these. 
    anantksundaramhcrefugeewatto_cobra
  • Reply 4 of 20
    maestro64maestro64 Posts: 5,035member
    If they are just using an IP address, this becomes problematic with the use of a VPN connection. There are couple VPN services that play nice with Netflix. However, during my research of doing whole home VPN using a router verses individual device, you need to make sure any service you use works through the VPN you have an account with, like Netflix. The problem comes in when the VPN may randomly reassign your public IP address as well as the server location you might be using,  If Netflix check the IP location against you home address it could cut you off of the two do not line up.

    I looked into getting router that allows selective routing to the VPN and there is only one on the market and it has privacy issues of reporting your traffic to third parties including your VPN activity which negate the reason for having a VPN.

     You may not think this is an issue, however, more and more people are using VPN because ISP’s are selling user data.
    watto_cobra
  • Reply 5 of 20
    davgregdavgreg Posts: 952member
    zeus423 said:
    I can see a few problems with basing this on IP address tracking. My Netflix account allows me to watch on two devices at the same time. Let's say I'm watching from home but my wife wants to watch while she's at work (during lunch, of course). Or perhaps I go on vacation and want to watch Netflix while falling asleep on the beach? How about students who go to college and log in via their parents' account? They are in the same family and should be able to use the same account, but the IP addresses would be vastly different. Hopefully Netflix does some pretty thorough testing before rolling this out to the masses.
    Hulu currently does this kind of thing on some devices-or has in the past.
    I work weekends out of town in a hospital - part of it call - and have been locked out of live streaming on my iPad Pro. Strangely enough I could log in on my MBA and watch.
    watto_cobra
  • Reply 6 of 20
    22july201322july2013 Posts: 2,938member
    I have never used Netflix, but I decided to go read the agreement to see what the truth is about sharing accounts. Here's what I found (I extracted and bolded the parts I thought were relevant):
    Netflix.com - Terms Of Use      https://help.netflix.com/legal/termsofuse <--
    Netflix provides a personalized subscription service that allows our members to access movies and TV shows (“Netflix content”) streamed over the Internet to certain Internet-connected TVs, computers and other devices ("Netflix ready devices").
    ...
    4.1. You must be at least 18 years of age, or the age of majority in your province, territory or country, to become a member of the Netflix service. Minors may only use the service under the supervision of an adult. 
    4.2. The Netflix service and any content viewed through the service are for your personal and non-commercial use only and may not be shared with individuals beyond your household. During your Netflix membership we grant you a limited, non-exclusive, non-transferable right to access the Netflix service and view Netflix content. Except for the foregoing, no right, title or interest shall be transferred to you. You agree not to use the service for public performances. 
    4.3. You may view the Netflix content primarily within the country in which you have established your account and only in geographic locations where we offer our service and have licensed such content. The content that may be available to watch will vary by geographic location and will change from time to time. The number of devices on which you may simultaneously watch depends on your chosen subscription plan and is specified on the "Account" page. 
    ...
    5. Passwords and Account Access. The member who created the Netflix account and whose Payment Method is charged (the "Account Owner") is responsible for any activity that occurs through the Netflix account. To maintain control over the account and to prevent anyone from accessing the account (which would include information on viewing history for the account), the Account Owner should maintain control over the Netflix ready devices that are used to access the service and not reveal the password or details of the Payment Method associated with the account to anyone. You are responsible for updating and maintaining the accuracy of the information you provide to us relating to your account. We can terminate your account or place your account on hold in order to protect you, Netflix or our partners from identity theft or other fraudulent activity. 
    Based on what I read above in the Terms of Use, the following are prohibited: (these are my interpretations of the Terms)
    • If you are on vacation in another country, you can't use the service, but 4.3 strongly implies you CAN watch in any geographic location in that same country where Netflix offers that service, if you still comply with section 5.0. And even if it doesn't imply that, you can probably change your address to your vacation location in accordance with the section 5 clause which says that you can update your account information for things like changing your address. If you change your address to reflect your new vacation location, that may suffice because Netflix doesn't define what constitutes your home address. But this may be a grey area.
    • You can't leave your children at home because the use of Netflix requires parental supervision (section 4.1), and you can't share your password with minors, but I did some additional research and found Netflix does have parental controls so if you use those properly you should be able to leave your children at home with Netflix's auto-login (even though the Terms of Use fails to mention this.) Similarly, if let your kids access Netflix from their own device, parental controls must be installed on it otherwise you would be in contravention of section 4.1.
    • The term "household" isn't defined, so that leaves some ambiguity that Netflix should clarify, but it probably does not include a parent or sibling who permanently lives in another house or a child who lives in a dorm at university for months at a time. In my opinion if a household member is going on a "short trip" (in the same country) they should be allowed to use the service from a remote location BUT they must still comply with section 5 which requires that the account owner have "control" over the device that they are using, so that probably excludes things like hotel TVs or your friend's device.
    • Section 4.3 seems to imply that VPNs are not permitted (without mentioning VPNs by name) if the VPN is crossing international borders (which is one of the reasons people use VPNs.) There is no mention that Netflix uses technology to block VPN access, but news reports say that they do. However the same reports indicate that accounts are not permanently banned, just locked out while VPNs are active.
    • Homeless people cannot use Netflix because they would need to have an address and a house in order to have a "household". I think some homeless person should sue Netflix. Is discrimination against homeless people permitted in the US? I googled it and I'm still unsure.
    dewmeanantksundaramhcrefugee
  • Reply 7 of 20
    rob53rob53 Posts: 2,951member
    If Netflix changes their software to be more like Hulu I’ll probably just cancel it. Netflix is slow to release new movies and I can get movies elsewhere. I also am tired of their regular cost increases. They should be happy with what they’re getting because enforcing their terms would lead to many users dropping down to single use and others totally dropping Netflix. 
    watto_cobra
  • Reply 8 of 20
    rob55rob55 Posts: 1,290member
    rob53 said:
    ... I also am tired of their regular cost increases. They should be happy with what they’re getting because enforcing their terms would lead to many users dropping down to single use and others totally dropping Netflix. 
    This is not unique to Netflix. I have been seeing annual increases with all my services (DirecTV, internet, Netflix, etc.) for a while now. What's crazy is that I've seen my DirecTV bill more than double in the 20+ years I've been subscribing to their service. Specifically, I've seen an average of a $10/month increase over the last 10 years. My question is, at what point (if it hasn't already) does it become unreasonable? I think I'm approaching that point soon, as I certainly will not be ok with another $50 increase if I'm with them for another 5 years.

    With regards to the topic, I use my account at my sister's house when I visit every week or so, and generally leave their ATV 4K logged in to my account. I don't think they use it much, except when I'm there, so I'm curious how Netflix might decide to handle this in the future.
    watto_cobra
  • Reply 9 of 20
    MplsPMplsP Posts: 3,646member
    I’m actually surprised it took so long for netflix to do this. The fact that half of a college campus could use one Netflix password has been common knowledge for a while. I share the same concerns that others do. Like 22July said, the term ‘household’ isn’t clearly defined. My daughter is at college but she’s still a dependent and still part of our ‘household’ as far as I’m concerned. And how about when I go to our cabin? If I’m on a guest wifi somewhere I use a VPN, meaning it will be another IP address. I assume they allow people to take reasonable precautions for their security?
    watto_cobra
  • Reply 10 of 20
    ITGUYINSDITGUYINSD Posts: 380member
    Does this apply to the single-screen $8.99 plan also or just the $13.99 2-screen plan?  It would be irritating to share my NF account with someone else if I had the single screen plan, sometimes wanting to watch at the same time.  But, the 2-screen?  I mean, it's an extra $5 so are they losing revenue?  How many of these cheaters would actually pony up $9/mo for their own?

    It's sort of like software copying where the companies would claim they're losing "x" millions of dollars to piracy yet most of those that pirate it wouldn't have bought it anyway.

    muthuk_vanalingam
  • Reply 11 of 20
    mcdavemcdave Posts: 1,916member
    I only recently realised these streaming services don’t allow family sharing (even if the App Store says they do).
    Most Apple devices only work well with a single AppleID so Apple & Netflix should have a discussion to better leverage Apple technology for a family tier. While they’re at it they can discuss AppleTV/Siri integration.
    watto_cobra
  • Reply 12 of 20
    aderutteraderutter Posts: 531member
    Recently got the Netflix cost increase, so I moved down the tier so Netflix end up with less money not more.
    Yes I moved from 4K to HD and less devices in response to the price hike.
    I think Netflix should simply charge per device and per quality.
    e.g. 1 x device at 4k would cost more than 1 x device at HD and 2 devices should cost double. I.e. no cost saving for extra devices.
    At present you have to pay the top tier if you only want one device on 4K which sucks and is the reason people “share” their account.

  • Reply 13 of 20
    MplsP said:
    I’m actually surprised it took so long for netflix to do this. The fact that half of a college campus could use one Netflix password has been common knowledge for a while. I share the same concerns that others do. Like 22July said, the term ‘household’ isn’t clearly defined. My daughter is at college but she’s still a dependent and still part of our ‘household’ as far as I’m concerned. And how about when I go to our cabin? If I’m on a guest wifi somewhere I use a VPN, meaning it will be another IP address. I assume they allow people to take reasonable precautions for their security?
    This. The IRS considers our son at college as part of our household ("adult dependent" status while at college full time through age 24).
    I'm talking to you, Netflix.
    watto_cobra
  • Reply 14 of 20
    22july201322july2013 Posts: 2,938member
    aderutter said:
    I think Netflix should simply charge per device and per quality.
    At present you have to pay the top tier if you only want one device on 4K which sucks and is the reason people “share” their account.
    Yes, such a pricing scheme would indeed benefit you. On the other hand, it wouldn't benefit all of Netflix's customers.

    I agree that you have every right to petition for Netflix to change its pricing so that it benefits you better.

    But I presume you weren't trying to say that there should be some law requiring that Netflix change its pricing structure because it doesn't work for you. All my life I've wanted fast food companies to stop selling "extra value meals" because those "bundles" don't really work well for me. It would be better for me if fast food was sold on an "a la carte" menu instead of bundles, just like you want Netflix to stop bundling things in a way that doesn't help you. But I realized a long time ago that I can't impose my preferences on any other person or corporation. I'm not the ruler of the world (yet.)
    dewmewatto_cobra
  • Reply 15 of 20
    Limiting it by IP would also potentially prevent usage on an iPhone, as that travels regularly outside the household.  So much for watching movies on the go.  Providers will also sometimes change your IP, so it’s not a sure fire way to block other people.
    watto_cobra
  • Reply 16 of 20
    davidwdavidw Posts: 1,567member
    hcrefugee said:
    MplsP said:
    I’m actually surprised it took so long for netflix to do this. The fact that half of a college campus could use one Netflix password has been common knowledge for a while. I share the same concerns that others do. Like 22July said, the term ‘household’ isn’t clearly defined. My daughter is at college but she’s still a dependent and still part of our ‘household’ as far as I’m concerned. And how about when I go to our cabin? If I’m on a guest wifi somewhere I use a VPN, meaning it will be another IP address. I assume they allow people to take reasonable precautions for their security?
    This. The IRS considers our son at college as part of our household ("adult dependent" status while at college full time through age 24).
    I'm talking to you, Netflix.
    What the IRS consider is that your son is part of your "tax household" because he is still your dependent. It doesn't matter where a dependent live, to be part of your "tax household". In order to be part of your "household", your son must only live away temporarily while attending college, for part of the year. When not attending college, he comes home. (Which might be your case.) But if your son has his own place and lives elsewhere all year round, even when not attending college, he is not part of your "household" but the IRS will still consider him part of your "tax household" because he is still a dependent.

    If a couple are divorced and the kid spends all the time living with one parent but they take turn every year claiming the kid as a dependent when filing taxes, the IRS still consider that kid as part of the "tax household" of the parent who don't have the kid living with them but claimed as a dependent. 

    However, with the US Census, if your son spend most of the time living away for college, he is not counted as part of your household. He is counted in the household where he lives most of the year.  Even if he comes home for 3 months out of the year when not attending class. But if he happens to be living at home on April 1st, the date in the year of the census, he can be counted as part of your household. But it's one or the other, not both.   

    With most Federal subsidy program, a household are the people living in one housing unit, that are somehow related.(by blood, marriage, adoption, foster, etc..) If you have a dependent child that is living with their grandmother elsewhere, that child is not counted as part of your household when applying for any Federal subsidy program. But will still be considered by the IRS, as part of your "tax household", if they are a dependent on your tax return. 

    I wouldn't think companies like Netflix, when they say "household" are using the IRS definition. If anything they are using the definition under the  US Census or Federal subsidy program or something in between. 

    If 3 people became roommates by renting a house together and one of them got a Netflix account, I would think that Netflix would consider that a "household", even though they are not related and would never be considered a "household" with the IRS or under most Federal subsidy program. But would be a "household" under the US Census. 
    watto_cobra
  • Reply 17 of 20
    Me: Either they crackdown on password sharing or they keep raising their prices.
    Netflix: why not both?
    muthuk_vanalingamwatto_cobra
  • Reply 18 of 20
    22july201322july2013 Posts: 2,938member
    As long as Netflix doesn't define "household" it will be up to the courts to decide what that means, so people can't be blamed for misinterpreting that word. Once Netflix defines that term, or changes that term, then the rules change (in 30 days, I think I read). They are Netflix's rules, just like Apple's rules are Apple's rules.
    watto_cobra
  • Reply 19 of 20
    dewmedewme Posts: 4,249member
    As long as Netflix doesn't define "household" it will be up to the courts to decide what that means, so people can't be blamed for misinterpreting that word. Once Netflix defines that term, or changes that term, then the rules change (in 30 days, I think I read). They are Netflix's rules, just like Apple's rules are Apple's rules.
    I really hope it doesn't get to the point of getting the courts involved in anything like this. Netflix could easily impose much more onerous mechanisms to prevent subscribers from sharing their service outside of the conditions they prescribe and users agree to up-front. With the plethora of streaming services available, voting with one's wallet is a really good option. 
    watto_cobra
  • Reply 20 of 20
    22july201322july2013 Posts: 2,938member
    dewme said:
    As long as Netflix doesn't define "household" it will be up to the courts to decide what that means, so people can't be blamed for misinterpreting that word. Once Netflix defines that term, or changes that term, then the rules change (in 30 days, I think I read). They are Netflix's rules, just like Apple's rules are Apple's rules.
    I really hope it doesn't get to the point of getting the courts involved in anything like this. Netflix could easily impose much more onerous mechanisms to prevent subscribers from sharing their service outside of the conditions they prescribe and users agree to up-front. With the plethora of streaming services available, voting with one's wallet is a really good option. 
    I presume we all know that the courts would not be deciding what Netflix CAN put in their user agreement, just what the terms in their license agreement MEAN. Netflix can redefine the terms at any moment and the courts wouldn't care.
    watto_cobra
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