Netflix Ends $9.99 Ad-Free Option as It Bans Password Sharing

2. Scroll down to Settings and select Turn on profile transfers.

3. Choose Allow, or if you have second thoughts about doing a transfer, Go Back to Home.

4. A message appears that lets you know the profile transfer feature will not be enabled for two days. To start the feature instantly, click on the confirmation link sent to your email.

If you choose to permit profile transfers, keep these things in mind: People using your account will be able to transfer a profile, including recommendations, viewing history, saved games, settings and more to a membership that this other person will pay for, Netflix says. Allowing such transfers doesn’t log any devices off your account, and no payment information will be transferred. Also worth noting: Profiles designated as Kids (children’s content) cannot be transferred.

You can review which devices have signed in to your account and knock off anyone who shouldn’t have access. If that happens, Netflix advises changing your password.

How common is streaming service sharing?

Nearly 2 in 5 Americans admitted to using another person’s streaming login, according to a February 2021 survey of more than 1,500 consumers commissioned by LendingTree. More than half of those said they streamed Netflix, compared with 31 percent for Hulu, 28 percent for Disney+ and 22 percent for Amazon Prime Video.

In the survey, most people “borrowing” account credentials were family members of the account holder. About a quarter were friends, 20 percent were significant others, and 5 percent were an ex. Almost a third confessed to secretly logging in without the subscriber’s permission.

Older adults are among the folks sharing streaming credentials with people who live outside their homes, but in smaller numbers compared with those younger, according to a 2018 survey of 1,000 streamers from Comparitech, a consumer website devoted to cybersecurity and privacy.

About a third of boomers and Generation Xers believe giving access to streaming content is ethical, compared with 76 percent of Gen Z streamers and 63 percent of millennials. The percentages were similar for those who believe receiving access is ethical.

Long-standing tolerance of password sharing

Netflix’s change reverses an open attitude about password sharing that has been around since the company began streaming in 2007. In an April 2022 letter to shareholders, Netflix acknowledged that password sharing helped fuel its growth by getting more people to use the service. It now sees those viewers as a big opportunity to reverse subscriber losses.

“Streaming services are certainly trying to adopt a one-account-per-household policy. And cracking down on password sharing is a big part of that,” says Paul Bischoff, editor of Comparitech.

Netflix probably knows who the serial abusers are, says Rich Greenfield, a partner at LightShed Partners media and telecommunications research company in New York. “My guess is they’ll go after the people who are the most rampant sharers first.”

Beyond Netflix’s current 238 million paying subscribers, last year’s letter estimated the streaming service was being shared with 100 million more households. The number of subscribers grew steadily during the pandemic, but some started leaving in the first half of 2022. Netflix subsequently stemmed the losses and added customers. In fact, the company gained 5.9 million subscribers in its most recent financial quarter when password restrictions went into effect.

Netflix competitors eat into profits

During the pandemic, folks stuck at home increasingly turned to the likes of Amazon Prime Video, Apple TV+, Discovery+, Disney+, HBO Max, Hulu, Peacock, Paramount+ and YouTube TV, plus ad-supported video on demand (AVOD) services. Other streaming services have felt the pinch as people emerged from pandemic restrictions — HBO Max and Discovery+ combined May 23 to become Max, though Discovery+ is still available separately — but Netflix profits worldwide declined by more than $600 million in 2022. 

While losing accounts isn’t ideal for any streaming provider, the pressure on Netflix may differ from that of its rivals. Most notably, Amazon and Apple have other businesses more critical to their bottom lines.

“In some ways it is a win-win for the rival services because they will be looking to see if the password crackdown works and drives growth for Netflix, in which case they may consider a similar policy,” Magid’s Hare says. “Or if there is backlash and Netflix actually loses subscribers, they may stay away from the issue and be perceived as more consumer-friendly.”

The risk of sharing passwords

Apart from ethical or legal concerns, when you spread your password to outsiders, even people you trust, you’re taking a risk. People tend to use the same or similar passwords across numerous websites and services, though it’s a big security no-no.

“If you had someone’s password, you could log in to their Netflix, know the type of content that they’re watching, and more easily come up with a targeted phishing attack on them,” says Chandler Givens, former director of product management for consumer privacy at Avast digital security and now a consultant and an adjunct professor at Towson University in Maryland. “You’d say, ‘We know you watched Caddyshack 15 times in the past year. We think you’ll like this. Click here.’ And then you click here, and it’s malware.”

About a quarter of users worldwide have never changed their passwords, according to Avast research. And 83 percent of Americans use weak passwords that are easy to crack.

Price increases force choices

The greater number of streaming options coupled with price increases in recent years are causing consumers to look at their budgets, Hare says.

The average number of video-on-demand services that viewers subscribe to doubled between 2019 and the end of 2021, with the average monthly tab for such services increasing by about $10 to $23.58, according to Magid. And more people subscribe to four or more services than those who don’t subscribe at all.

“Consumers are hitting their limits with how much they are willing to pay and how many services they will subscribe to,” Hare says. Netflix knows its subscribers could switch easily. “Netflix does not want this to backfire and lose consumer goodwill.”

This story, originally published May 9, 2022, was updated to account for Netflix’s crackdown on password offenders, as well as plan changes and updated subscriber numbers.