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Kenzie Wilson

2023/07/06

An In-Depth Look At Netflix’s Account-Sharing Prevention

Those who read the terms and conditions before signing up for a subscription would know that it has always been against policy to share your account with others.

Those of us who haven’t been reading the T&C are astounded by the news that Netflix is cracking down on account sharing.

There have been rumblings for a while that Netflix was looking to crack down on account sharing; however, after nearly a year, Netflix finally made their announcement.

How does Netflix define account sharing?

Netflix is designed to be shared by one household. A household, defined by Netflix, is a collection of devices connected to the internet at the main place you watch Netflix.

Account sharing occurs when you share your login credentials with someone outside of your household.

Why is Netflix preventing account sharing?

Account sharing costs Netflix an estimated $25B every year not to mention the cost of the infrastructure needed to support all the “shadow users” (users who consume the product but don’t pay for it).

How does Netflix detect that someone is sharing their account?

Netflix users have been asked to set a primary location for their account. Users have access to the new Manage Access and Devices page where they can manage who has access to their account.

Netflix uses a combination of IP addresses, device IDs, and account activity to determine whether the user is a part of the primary account holder's household. If a user is traveling they must log in at the primary location once every 31 days.

Once they detect account sharing, how do they convert this shadow user?

When Netflix detects account sharing they first reach out to the shadow user, someone using the account outside of the primary location. They let the shadow user know that they are breaking Netflix’s rules and that they need to sign up for an account of their own.

If the shadow user wishes to stay on the same account the primary account holder can pay an additional $7.99 per month for up to two additional users.

If the shadow users ignores the initial warning when they try to log in again they won’t be able to without signing up for their own account.

Results

Many were baffled by this announcement, outraged even. There are millions of unique cases in which coming back to the same address every 30 days is unfeasible. Children going off to college, someone who is in the military, and the list goes on.

However, with the increased competition in the streaming industry, all companies are looking at their services differently. Hulu, Disney+, and more have raised their prices. Netflix decided to pursue the 100 million users who were using their services without a subscription.

And clearly it worked, with Netflix reporting their four single largest days of U.S. user acquisition in the past four years. Netflix saw the largest spike in sign-ups since COVID-19, an increase of +102% from the prior 60-day period.

To see how you could capitalize on your shadow users, sign up here.