Netflix (NFLX) has revealed the first details of its crackdown on password sharing.
According to the streaming giant’s help center, which has updated its FAQ pages for countries currently in full repression (Chile, Costa Rica and Peru), Netflix accounts will remain shareable but only within the same household. (The US could be next in Q1.)
As a result, Netflix will ask users to identify a “primary location” for all accounts that live in the same household. Users will need to connect to the primary location’s home Wi-Fi at least once every 31 days to ensure their device is not blocked.
The company said it will use information such as IP addresses, device IDs, and account activity to determine whether a device logged into the account is connected to the primary location.
When someone logs into the account from a device that is not part of the primary location, or if the account is persistently accessed from another location, it will likely be blocked.
To circumvent this, the primary account holder will need to verify the device via a temporary code. Once verified, the traveling member can watch Netflix for seven consecutive days. It is unclear if you can request multiple temporary codes after the 7 day period to avoid paying for an additional account.
Netflix Reveals
Netflix warned in its quarterly letter to shareholders that it would step up its efforts to crack down on password sharing.
“Later in the first quarter, we plan to begin rolling out paid sharing more widely. Account sharing widespread today (over 100 million households) undermines our long-term ability to invest in and improve Netflix, as well as ‘to grow our business,’ the company said.
Coupled with a crackdown on password sharing, Netflix will also leverage its new ad-supported tier to increase profitability, especially as competition within the streaming space intensifies: “As always, our northern stars continue to please our members and generate even greater profitability over time.”
According to information Netflix told advertisers it saw a doubling in sign-ups for its advertising tier in January compared to December – a positive sign of subscriber momentum as the streamer looks to boost revenue.
Netflix Reveals
Netflix reported net additions of 7.66 million in the fourth quarter, above the company’s forecast of 4.5 million, amid a slew of high-profile and record-breaking content releases, including “Glass Onion.” , “Troll”, “All Quiet on the Western Front”, “My Name is Vendetta”, and “Wednesday”.
The company also announced that co-CEO and co-founder Reed Hastings will step down from his role as head of the company, with COO Greg Peters joining current Netflix co-CEO Ted Sarandos in that role. Hastings will now serve as the company’s executive chairman.
Netflix stock has seen a tear in recent weeks, up about 55% in the past six months with a gain of about 20% so far in January, far outpacing the Nasdaq’s 3% drop Composite.
Alexandra is a senior entertainment and media reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at alexandra.canal@yahoofinance.com
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