Explained: How changes to Netflix password sharing affect you
As we reported exclusively earlier today, Netflix has introduced their password sharing restrictions to Australian users, meaning account holders can no longer share their password with family or friends who do not live in the same household.
For Netflix, the anger from customers will be short and sharp, but the questions around these changes are the main area of confusion.
So just how will these Netflix sharing changes affect you?
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Why is Netflix doing this?
In simple terms – to make more money.
Netflix is a multi-billion dollar company, but in 2023 more than ever faces stiff competition from a range of streaming platforms around the world. This competition isn't just for customers, but for content.
It costs a lot of money to make TV shows and movies, so Netflix needs the biggest possible war-chest to spend on that, as well as making a return for their shareholders.
The company wants to be sustainable for the long term, and key to this is ensuring that everyone watching Netflix is actually paying for it.
No one else has my Netflix password – does this make any difference to me?
If you're using your account for yourself, in your own home and on your own devices – there's no changes at all.
I pay for multiple users on my account – why can't I share my password?
There are some confusing things about the way we use and subscribe to Netflix that are conflicting for people.
Think of it this way: there is the 'account', there are the 'users' and there are the 'devices'.
The Account is the username and password used to login and the credit card used to pay. Those things are your account.
Users are those cool profile pictures you get when you load the app – 'who's watching' – your's might say Mum, Dad, kids etc. Those are user Profiles, and everyone on Netflix is allowed to have five of those user profiles on your Netflix account.
These profiles mean you can see your own viewing history, personalised recommendations and not have those messed up by what your partner or family are watching.
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Devices refers to what you are actually using to watch shows. Your smart TV, tablet, phone, computer – these are all devices.
The Basic Netflix plan allows you to be watching on one device at a time.
If you pay more for Standard, you can be watching on a TV while someone else can be on a tablet for example.
Pay for Premium and there can be four devices of any kind watching Netflix at the exact same time.
However, those users and devices cannot be permanently in another household.
You're signed up to the Netflix terms and conditions, which have always stated this – we just didn't know it or ignored it.
I have a Netflix family account – does this affect me?
There is no such thing as a family account. You're probably paying for 'Premium' which gives you four simultaneous devices and you have multiple user profiles.
It's never been a "family thing" for those who don't live together – unfortunately, this is just how many people have been using it.
How will Netflix know we're not in the same home?
Every device that connects to the internet has an IP address. Your phone when on mobile data, your home modem, and the modem at your kids' place.
Netflix will see multiple IP addresses being used, and will put up warnings on those that are not in the primary household.
Does this mean I can't use Netflix when I travel?
Not at all. Travel with your own device, and as long as that device has been at home and you open Netflix on it once a month, it will be registered as a home device and eligible to stream.
If you travel and log in on another TV like at a holiday home or AirBNB, you will be required to jump through some hoops to verify you are really the account holder.
And this won't be possible ongoing, so you can't pretend to be AirBNBing at your mother-in-law's place.
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How does Netflix know which user is the main 'household'?
This will be done using a verification code being sent to the main account holder via email.
Just like when banks verify who we are by text, only the main account holder can get the code and set the home location.
What is an Extra Member?
Part of this new plan arrangement allows you to purchase an 'Extra member' for your account.
This will cost $7.99 (cheaper than even the Basic plan for a new user), and allow your friend or family member to have their own login, password and profile.
However, the billing will come through your account, not to the extra member.
Standard plan users can have one extra member, Premium plan users can have up to two.
Those extra members can only use Netflix on a single device at a time.
Will other streaming platforms do the same thing?
It certainly cannot be ruled out right now.
While no other platform has announced a similar plan, we have to assume they will look closely at the affect this has on Netflix and decide how best to implement or not in their own business.
Won't Netflix lose customers over this?
In the three months since launching the Sharing crackdown in Canada, Netflix reported a very clear disconnect from customers, but the registration of new accounts either unique or as extra members of existing accounts has meant the company has more users and more revenue and is growing faster than ever.
So the net effect appears to be that it's positive for Netflix, despite the initial outrage from customers.
Nine, the publisher of this website, owns streaming service Stan, which is a competitor to Netflix.
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