Netflix's Crackdown On Password Sharing Is Just Around The Corner

Those who share Netflix passwords NFLX -3.17% are going to have a hard time letting go.

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As part of its stance against sharing logins, Netflix (ticker: NFLX) has promised to clamp down on users who do so. According to the company, as many as 100 million households are currently streaming video without paying a subscription to the service, which is available for free to subscribers on the site. In spite of this, those days are fast becoming a thing of the past.

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In its first-quarter earnings report released on Tuesday, Netflix noted that it has already introduced what it has euphemistically called "paid sharing" in four markets in Latin America, as well as in Canada, New Zealand, Spain, and Portugal. Following a testing period in Latin America, Netflix plans to roll out the strategy in these countries as well. Following a spike in customer churn in Canada specifically, the company noted that the number of subscribers is higher than what it was before it began enforcing the limits on sharing passwords with other subscribers after initially enforcing the limits on sharing passwords. Currently, Netflix is reporting a faster-than-expected growth in revenue in Canada as compared with the United States.

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On Tuesday, Netflix announced that in the upcoming quarter, paid sharing would be available in the United States and elsewhere. A letter from the company disclosing its first-quarter earnings said that paying for advertising in the long run would give the company a larger revenue base so that it could grow as it improved its service in the long run.

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There has been a recent news that Canadian and New Zealand Netflix users can add as many as two additional users to their Netflix account for $7.99 a month; that would not be surprising if this approach were to be adopted in the U.S. market in the near future. In Portugal and Spain, the extra accounts are priced at 3.99 euros and €5.99 respectively.

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There is no reason to be concerned, since the company has noted that users will still have the option of watching documents while traveling, and that people who are already on a Netflix account will have the ability to transfer their profiles to their new account, preserving their personalized recommendations and viewing history.

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It has been announced that Netflix account holders will be required to establish a primary location where they will be able to use their Netflix account regardless of where they live. Despite the fact that this information is quite clear, it has not been stated that Netflix will soon begin blocking access to their account for users who currently use a shared password to log in to their account.