Netflix’s Password-Sharing Crackdown Is Coming to the U.S. by June

The company says it will bring add-a-member and add-a-home features to its largest market after testing them internationally

LOS GATOS, CA – JANUARY 22: A sign is posted in front of the Netflix headquarters on January 22, 2014 in Los Gatos, California. Netflix will report fourth quarter earnings today after the closing bell. (Photo by Justin Sullivan/Getty Images)

Netflix’s crackdown on password-sharing will hit the U.S. by June.

As part of its first-quarter earnings announcement, the streamer revealed plans Tuesday to start implementing features to charge for additional homes and members, after testing them internationally. The company said it plans to implement the features during the second quarter this year.

In the earnings statement, the company said that paid sharing is a big initiative for the streamer. Netflix has calculated more than 100 million households currently share accounts.

“We’re pleased with the results of our Q1 launches in Canada, New Zealand, Spain and Portugal,
strengthening our confidence that we have the right approach,” the company said in the earnings statement. “As with Latin America, we see a cancel reaction in each market when we announce the news, which impacts near-term member growth. But as borrowers start to activate their own accounts and existing members add ‘extra member’ accounts, we see increased acquisition and revenue.”

The company warned that the new initiative would likely see a short-term reduction in Netflix viewership data from third parties like Nielsen, but that they predict U.S. subscriber behavior will mimic those of other countries where growth stabilized over time as more account “borrowers” start to get their own accounts.

As reported earlier this year, Netflix subscribers will only be permitted to log into their accounts using one home wireless network. Under the new regulations, users must connect to the Wi-Fi at their primary location and stream a series or movie on their app or web browser at least once every 31 days while establishing so-called “trusted devices” that Netflix software will recognize.

The system works by scanning for IP addresses, device IDs and account activity to verify if a device was signed into a Netflix account within a designated primary location.

A subscriber’s device is blocked when login attempts are made outside of the set primary location, and the software will prompt them to sign up for a new account at that time. Netflix will not automatically charge account holders if their login attempts are made outside of their home or designated location. And it is also making it easy for users in shared accounts to transfer their user profiles to new accounts.

For users hoping to stream content while traveling, the company revealed in February that when signing on from a business device or hotel smart TV, account holders can receive a temporary code from the streamer that grants access to content for a week.

Netflix users who are on a Standard or Premium plan in some countries can share their account with someone who doesn’t live with them by adding an extra member to their account. The streamer’s Help Center does not currently offer that option for users in the U.S.

The new regulations, which are currently in place in countries like Canada, Chile, Costa Rica and Peru, are also broken down on the streamer’s Help Center page.