Netflix plans to restrict people who live in different places from using the same account. The company has already started testing a new verification system, which began to show a warning with a suggestion for the user to create his own account.
Following the release of its financial subscriber report, Netflix confirmed that it is struggling to keep different households from using the same account. The latest financial report showed a decline in the number of paid subscribers, causing the stock to drop about 35%. Now the company says it will track all of its subscribers who use the same account in different households. And there are quite a few of them.
According to Netflix, about 100 million households use the password-sharing feature. All of this is a missed opportunity, and the company says it is the main reason for the decline in paid subscribers this quarter. It is estimated that about 200,000 users left the platform or decided to use the account sharing feature with password sharing.
Of course, the practice of sharing passwords has been around for quite some time. Some people use passwords for casual viewing, while others watch Netflix daily. The streaming service will try to solve this problem.
Netflix CEO Reed Hastings previously talked about plans to create a new version of the service with ads. Such a version could appear as early as next year.