Netflix plans to officially end password sharing in early 2023 after turning a blind eye to the practice for years, according to a new report.
The streaming service will begin the crackdown in the United States and gradually expand it, according to the Wall Street Journal.
Netflix claims that 100 million people watch its service for free using a friend or family member’s password. The streamer could bring in around $721m (£596m) in extra revenue next year by cracking down on the method in the US and Canada.
Although Netflix expressly prohibits the sharing of passwords, it has long allowed it to go unchecked, fearing it could alienate customers who now have more streaming options than ever, including platforms free channels such as Amazon Freevee and on-demand services from public broadcasters in the UK. With competition growing, Netflix introduced a cheaper basic subscription with adverts in November that costs £5 per month.
Rumors of an official crackdown follow news that sharing streaming passwords may be illegal in the UK.
The Intellectual Property Office (IPO) – a government agency that oversees patents and trademarks – said on Tuesday the practice violated copyright law.
The IPO has since removed the reference to password sharing in its guidelines on the government website.
The original IPO page, recorded by the Internet Archive hereincluded “password sharing on streaming services” in a list of things that “break copyright law” compiled with help from Meta.
the newly updated page removes the mention altogether, leaving things like “pasting internet images into your social media without permission” and “accessing movies, TV shows, or live sporting events through Kodi boxes.”
But despite this, the government’s initial opinion still seems to hold. A spokesperson for the IPO confirmed The telegraph that password sharing was a violation of copyright law and could even constitute fraud.
“There are a range of criminal and civil law provisions that may be applicable in cases of password sharing where the intent is to allow a user to access copyrighted works without payment” , said the spokesperson.
“These provisions may include breach of contract terms, fraud, or secondary copyright infringement depending on the circumstances.”
Will Netflix take legal action against password sharers?
Despite these strong words, it is ultimately the courts that will decide if password sharing is really illegal or not. And that’s assuming any streaming company would risk taking legal action against someone doing this.
For its part, Netflix has never said that it will take any legal action in such cases. As recently as 2017, the streaming giant’s own social media account tacitly endorsed the following:
It’s fair to say that Netflix’s attitude towards password sharing has changed significantly in the five years since, with plans to charge a tax to those who share IDs beyond their household. Netflix says it uses information such as IP addresses, device IDs and account activity to track how many households connect to its service.
However, it seems unlikely that the company would risk the public relations backlash of a lawsuit, even if deliberate password sharing could be proven beyond doubt (rather than being blamed for a password breach). outmoded).
Historically, fining users for piracy has proven to be both onerous and bad publicity for the companies involved, even though Topware Interactive was able to extract £16,000 from woman for hacking her Dream Pinball 3D game.
The contentious practice of mass mailing suspected hackers and fishing out cash payments to prevent legal action is less common than it was in the early 2000s, but is still occasionally used. Last year, Virgin Media customers were offered the chance to settle a possible legal action over the download of the Netflix film Ava with a payment of just over £800.
In the court of public opinion, such legal action often proves counterintuitive, even for active piracy – something for which much of the public has little sympathy. Going after streaming subscribers who share an expense with friends and family during a cost-of-living crisis would be a terrible idea, no matter how much companies may lament the potential loss of revenue.
Ultimately, streamers may well prefer the quiet life of banning accounts for violating terms of service, rather than claiming a crime has been committed and risking harsh negative publicity.