Netflix charges fee to discourage password sharing


Heather Song, Social Media Manager

College freshman Anisha Gandhi often enjoys spending her free time watching Netflix whether it’s by herself or with her friends. Netflix’s teen dramas, original shows and movies keep her especially delighted with her family’s subscription. So when Gandhi first found out about Netflix’s plan has to crackdown on password sharing, she was disappointed and slightly frustrated.

 “Netflix is already overpriced and families come in all shapes and sizes so there should not be restrictions on who can access the accounts,” Gandhi said.

But despite Gandhi’s concerns, starting in March, Netflix will implement a monthly fee of $3-4 for anyone living outside of an account holder’s household who wants to share a Netflix account. Netflix said it will find those sharing accounts by monitoring user data including IP addresses, device IDs and account activity. The company sees the fee as a way to crackdown on password sharing which they say led to almost $1 billion lost in revenue during 2022. 

While Netflix said the new policy will help it improve revenue growth, sophomore Divya Gandhi said the fee is especially unfair for families with children in college and will leave many frustrated users unsatisfied with their subscription. 

“People are going to get (so) fed up with having to pay extra that they’re going to quit altogether,” Gandhi said.

Sophomore Oliver Levine said although this sharing fee may increase subscriptions in the short term, long-term consumer loyalty will decrease. 

“I do think password sharing will increase subscriber count,” Levine said. “But being able to password share to a friend outside of your house is definitely one of those things that makes people think, ‘Oh hey, this company is at least nice to me.’” 

Levine said a negative opinion of Netflix could also be a deciding factor in whether or not someone continues their subscription. 

And senior Ariana Cao said since there are so many other competing streaming services, Netflix should be careful about how it treats current customers, even though she said the company’s prominence gives it an advantage over its competitors. 

“Netflix is like a basis of our pop culture,” Cao said. “A lot of other streaming services have good shows, but it’s just not as many as Netflix.” 

Levine also said each streaming service’s own unique variety of programs decreases the need for others. 

“TV networks are spinning off their own streaming services … which devalues every other streaming service because you’re paying the same amount of money for less value,” Levine said. 

But Economics teacher Grant Blackburn said he thinks implementing the sharing fee is a necessary step for Netflix’s business model.

 “They have to figure out a way to monetize their consumer base, and they can’t just let everybody jump onto one password,” Blackburn said. “Otherwise, Netflix goes away.” 

 But Cao said instead of increasing fees, Netflix should resolve the profit issue by listening to users for input on which programs to renew and cancel. 

“They need to renew shows that people really love and that everyone’s buying (Netflix) for,” Cao said. 

Blackburn, though, said Netflix and other streaming services have a tough trade-off to make between costly features and keeping subscribers. Ultimately, he said the success of cracking down on password sharing will depend on Netflix’s ability to provide for their consumers. 

Blackburn said, “At the end of the day, if (Netflix) has something that you want, you’re going to be willing to pay for it and Netflix has to deliver.”