Global OTT giant Netflix is mulling starting a crackdown on its subscribers in the US, who share their passwords with friends for availing of the services by the end of March. Most of you must be worried about the announcement, however, a thing that you must be wondering is how exactly will this work.
Based on the initial reports and trials conducted in other countries the effort to deter password-sharing will be done relatively gently in its first tranche, which will be basically based on a combination of technology and user conscientiousness.
This is how Netflix is trying to put a gag on password sharing:
Reportedly, Netflix is most likely to use a person’s geographic location, as determined by the IP address of any internet-connected device, to figure out which people count as "household" members who live together.
A reporter in conversation with a TV media said, "If you're watching on a TV, it'll provide exactly where you are. "They only want people in your household, at your address, watching."
Netflix in its detailing on the website has mentioned the company uses "IP addresses, device IDs, and account activity from devices signed into the Netflix account" to determine which devices are in the same household.
Stricter norms over Password sharing:
Netflix has informed its investors last week that it would be rolling out more stringent laws by the end of March. Based on the reports at present close to over 100 million households currently share Netflix passwords. That "undermines our long-term ability to invest in and improve Netflix," the company said in a statement accompanying its latest quarterly results.
Greg Peters, Netflix’s recently promoted co-CEO, informed his investors on a call last week, "This will not be a universally popular move, so there will be current members that are unhappy with this move. We'll see a bit of a cancel reaction to that."
The company initiated the move on it last year when it limited its password sharing in Latin America directing the users to pay an additional fee to share the account’s access with non-household members. The result, as informed by the OTT platform was mixed. Tech publication Rest of World called the test "a mess," reporting that the new policy was rolled out inconsistently.
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However, Netflix predicted a similar response in the U.S. "From our experience in Latin America, we expect some cancel reaction in each market when we roll out paid sharing," the company told investors, noting that could hurt its viewership in the short term.
The company is yet to inform how much will these sub-memberships could cost. Although, based on the reports by a leading American media house in trials conducted in Latin American countries like Chile, Costa Rica and Peru, sub-memberships increased the monthly cost of an account by one-quarter or one-third.
US-based analysts believe the company expect an added member charge of around $3 to $4 a month, according to Netflix's most recent earnings call with investors.
Over to that if Netflix finds that a single account is being used in too many locations, it will deploy a technological nag as used in authentication that asks users to “verify” using some verification codes.
A company FAQ associated with similar query answers, "When a device outside of your household signs in to an account or is used persistently, we may ask you to verify that device before it can be used to watch Netflix.”
Speaking to the company’s investors last week, co-CEO Peters described this by saying, "give them a little bit of a nudge and create features that make transitioning to their own account easy and simple."
If the company finds users violating the norms Netflix replied by saying users will not be automatically charged if the system detects too many location streams, nor will accounts be cancelled.
But this particular case has led one to ponder how will the password crackdown will truly be effective. The best response to this comes from the renowned Journalist Todd Spangler who writes saying, "All signs indicate that the most aggressive Netflix intends to get in the first iteration of the paid-sharing rollout is to keep prodding violators with email reminders and notifications."
Company’s executives over the essentiality of the move said on the investor’s call, “The company's hope is to dramatically increase its paid viewership. Even though Netflix is the leader among streaming services in terms of subscribers, it commands only 8% of TV time in the U.S.”