Technology

Netflix Is Testing a Crackdown on Password Sharing

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  • Netflix is running a test cracking down on password sharing.
  • Some customers are getting a message on their screens prompting them to sign up for their own account if they aren't watching with the subscriber.
  • Netflix has historically ignored password sharing, even as about one-third of all users share passwords.

Netflix has never made a big deal about password-sharing, but a new test suggests the company may be reconsidering.

Netflix is trying out a new policy with some customers, prompting certain people to sign up for a separate account if they aren't watching with the subscriber.

The message reads: "If you don't live with the owner of this account, you need your own account to keep watching." The Streamable first reported about the trial.

According to a spokesman, Netflix tries "hundreds" of tests a year with select customers.

"This test is designed to help ensure that people using Netflix accounts are authorized to do so," Netflix said in a statement.

The trial may not lead to a larger crackdown around password sharing. The test could be applied for account security as well as sharing passwords.

About 33% of all Netflix users share their password with at least one other person, according to research firm Magid. Netflix's basic plan costs $8.99 per month. The company's standard plan is $13.99 per month, which allows users to watch Netflix on two screens at the same time. Historically, Netflix hasn't done much to stop password-sharing, as strong growth in subscriber numbers and its stock price offset any concerns about lost revenue.

Netflix announced earlier this year it topped 200 million global subscribers, but shares have underperformed the S&P 500 this year as investors have moved away from growth stocks. Netflix must also fend off a slew of new streamers -- including Disney+, AT&T's HBO Max, NBCUniversal's Peacock and ViacomCBS's Paramount+ -- to ensure users aren't moving to competitive services.

Disclosure: NBCUniversal is the parent company of CNBC

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