Netflix begins cracking down on password sharing in India

After cracking down on password-sharing in over 100 countries, Netflix has shifted its focus to India. Starting from July 20, users in India will only be able to share their passwords with members of their households.

"A Netflix account is for use by one household. Everyone living in that household can use Netflix wherever they are—at home, on the go, on holiday—and take advantage of new features like Transfer Profile and Manage Access and Devices," Netflix said in a statement.

However, it is not clear whether the OTT platform will follow the same model for curbing account sharing as it had been doing in other countries. In other geographies, a Netflix account is tied to a unique IP and users must log in to their home WiFi connection every 31 days to avoid getting logged out of their accounts.

After testing the waters in countries like Portugal, Canada, New Zealand, and Spain, Netflix began its crackdown in the US on May 24 this year. In these countries, the streaming firm has also allowed for an option for users to add an extra member to the subscription tier after paying additional charges.

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The move comes as a response to the mounting challenges posed by the practice of sharing account credentials among multiple users, which has been a long-standing concern for the company. However, the change in the business model comes as a U-turn as Netflix began promoting its password-sharing initiative in 2013.

"We’ve always made it easy for people who live together to share their Netflix account with features like profiles and multiple streams," it recently said in a blog post.

However, in early 2022, the streaming giant saw its subscriber base shrink for the first time, and the company blamed it partly on password-sharing.

The restrictions have been expanded to more than 100 countries, accounting for over 80% of its revenue, according to an earnings letter Netflix shared with the shareholders. The move comes after a successful trial period in select regions, where the company observed a low cancellation rate and saw encouraging results in terms of monetisation.

Since the introduction of paid sharing, Netflix said it has witnessed a notable trend of converting borrower households into full-fledged paying members, along with the growing popularity of the "extra member" feature, which has contributed to increased revenue and paid memberships. It has not offered this option in countries where it has implemented recent price cuts, including Indonesia, Croatia, Kenya, and India.