Can Netflix add new subscribers from those who share passwords?

Streaming giant must monetize new users without infuriating core customers

Today's expression: Grow up
Explore more: Lesson #549
February 23, 2023:

As Netflix plans to roll out its new policies on password sharing, it faces a balancing act between two priorities: getting password-sharing viewers to pay up, while also not angering legitimate users. The authentication rules will work for the average household, but a lot of people are not average. Plus, learn the English phrasal verb "grow up."

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The world’s biggest streamer is about to take a risky gamble. How will Netflix manage its password-sharing problem?

Lesson summary

Hi there everyone, I’m Jeff and this is Plain English, where we help you upgrade your English with current events and trending topics. Who knew there was so much to say about password sharing? This is a follow-up to lesson 548 , so if you haven’t heard that one, go back one episode in your podcast player and listen to that one. Or, if you’re on the web site, check out PlainEnglish.com/548.

This lesson, however, is number 549 and JR has uploaded the full content to PlainEnglish.com/549. JR is the producer, and he’s the one who makes sure you have the full lesson content each and every Monday and Thursday.

Like I said, today’s lesson is a continuation of Monday’s topic. How Netflix is cracking down on password-sharing. The expression we’ll talk about today is “grow up” and we have a song of the week. Let’s get going.

Netflix password rules aim to add new subscribers without too much pain

Here’s a recap of Netflix’s new password rules . Every account will identify a “ primary location ,” which will be the internet connection of the accountholder’s home . Any device that connects at the primary location is good to go . Any device that connects at the primary location just once a month is also fine, no matter where it logs in. But if a device connects, and if that device has not connected at home in the last 31 days, then the accountholder gets an access code via email. The code must be entered within 15 minutes, or access is blocked .

These policies are intended to make it inconvenient to share a password outside a household or a family. If I share my password with a friend in another city, then it’s going to be very difficult for that friend to stay on my account. I suppose, with a lot of effort , we could coordinate a time to share the access code. But most people will probably decide it’s not worth it, and get their own accounts.

Still, some password-sharers are single individuals and they don’t think a full Netflix account is worth it. For those people, Netflix has an answer: a sub-account. This lets a primary accountholder pay just a little more to add another person , outside the household, to the account. The other person has his or her own login and password, his or her own primary location. They don’t have to password-share or share access codes. The cost of that additional user is well below the cost of a new account—only about 25 percent of the cost of a full account.

I think this is a good middle ground . Netflix gets a little extra money for the other subscriber. I, as an accountholder, can be generous and share the account with someone else for just a little bit more. But it doesn’t allow people to get a paid service for free, when they’re really not entitled to it .

The classic example is families with older children. As the kids graduate and leave the house, perhaps go to study, the family can pay a little extra so they can watch as individuals with their own logins.

Then, when they share an apartment with friends or when have families of their own, they can get their own accounts. It’s not necessarily fair that a single person—ahem!—pays the same price as a family of six. So I think you’ll find solo households join family households as sub-accounts.

I’m sure you know people who have sprawling networks of friends-of-friends connecting and sharing a single password—that will probably be reduced to smaller networks of closer family and maybe friends on one account. I would think a primary accountholder might share with one or two people, but not seven or eight like some do now.

I also think this will improve cybersecurity . I can tell you from personal experience that I have changed my password to streaming services less often than I should because I know other people are using the password. And yes, that means I am guilty of password sharing, too. If a sub-account holder has his own username and login, then we both can create strong passwords and change them whenever we need to.

Some people will decide they’ve grown up , and they want to set up their own Netflix accounts, instead of logging into a friend’s account. But if you’ve built up a playlist and a watch history in your profile on one account, you don’t want to lose that history. Remember, Netflix knows what to recommend based on what you’ve watched. If you start a new account or a new profile from scratch , you lose your watch history and the recommendations are not as good.

Netflix will help here, too. They have made it easy to take a user profile and move it to a different account. This means that if I have my own profile on JR’s Netflix, I can take my profile and my watch history and move it to my own account when I’m ready.

That’s the good . Now for the bad: Netflix has made a good set of rules for the average household . But this is going to be very inconvenient for a lot of people who might not be in an average household.

Remember that everything centers on the “primary location,” and the primary location is defined by the IP address of the internet service at your home. If you log in at home, Netflix remembers that device for 31 days. But if you have a device that you never connect at home, then you need to authenticate that device every seven days by checking the primary accountholder’s e-mail address.

I, for example, only ever watch Netflix on my computer when I am away from home . So my computer will never access Netflix at home—only away from home. So every time I access Netflix on my computer, I’ll need to check my email and log in with a code. Or at least I’ll do that once a week.

This is fine for me. I’m a single person in a single-person household and I can always get my e-mail. But what if I’m a legitimate member of a legitimate Netflix-paying household, but my e-mail address is not the primary account e-mail address? Every time I log in, I have to contact someone else—the primary accountholder—to get an access code. And I’d better do it within 15 minutes, or the code will expire.

Imagine a family of five. One parent travels for work. That parent might want to connect late at night after arriving at a hotel, or download some shows early morning before a flight . The other parent is a nurse , and that parent can’t be checking e-mail and sending codes during the day. One kid is away from home at college and keeps odd hours . Two other kids live at home. How is this family going to manage the access codes ? I literally can’t even imagine how they’ll do it. And this is not an unusual example .

There are also people—and this is not as common in the U.S. or Europe—but there are a lot of people who don’t have home internet. They only access Netflix—they only access the internet—ever—via a mobile device . In that case, there is no “primary location” because everything—every family member, every connection, every time—is mobile. They will have to re-authenticate every device every seven days.

There are other dynamics here, too. What about divorced couples with children? Mom and dad maybe don’t want to be texting a lot . What about a family—a married couple—that simply live in other cities, for work , immigration , or other reasons?

What if a family has two homes? Every television and every device connecting at the second home would need to be re-authenticated every seven days. Being an accountholder is going to be like having a part-time job with all the authentication that will be needed .

Location-based is going to cause trouble

I think the sub-account holder is a great idea. That is going to work. That is a legitimate way of extending a subscription to one or two other people who don’t live in your home. And it’s paying something, but it’s cheaper . That’s fair.

But this business of authenticating via e-mail—this in my opinion is going to be a major problem . I just don’t think that in 2023 you should create all these rules based on a place. It’s going to be really messy, especially with the way households and families legitimately work in the year 2023.

I really think the answer is to use QR codes, authentication apps, something like that, and to tie account access to a person , not a location. We’ll have to see. This is coming to your Netflix account in March or April 2023.

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Expression: Grow up