More Streaming Services Crack Down On Password Sharing

In the current era of digital consumption, it’s nearly assured that your home is connected to at least one streaming platform. Recent studies indicate that 88 percent to 99 percent of households maintain at least one subscription, with the average household subscribing to around three services.

Last year, Netflix took a stand against password sharing, a practice where users would use someone else’s account to access content without paying for their subscription. Netflix urged users to create sub-accounts or start their own, knowing this move wouldn’t be well-received. In April, the company even warned shareholders of the expected “cancel reaction.”

However, Netflix’s decision to abandon its longstanding practice of allowing account sharing with members outside the household seems to have paid off. By October, just six months after the crackdown on password sharing began in the U.S., Netflix reported subscriber gains that exceeded projections. Despite the crackdown and increased subscription prices, Netflix experienced its third consecutive quarter of subscriber growth.

Following in Netflix’s footsteps, Disney+ announced plans to crack down on password sharing starting in 2024, with CEO Bob Iger stating that it was a move to “drive monetization.” This decision came after Disney+ witnessed declining subscribers for two consecutive quarters.

Recently, Disney implemented these changes, updating its subscriber agreement and imposing limitations on sharing accounts outside of the household across its platforms: Disney+, Hulu, and ESPN+. These changes were effective as of January 25 for new subscribers and will be implemented for existing subscribers on March 14.

Max (previously HBO Max) has also outlined in its terms of use that it can modify access or turn off features to limit the impact of account sharing outside of the household. While the company has yet to comment, reports suggest Max may soon crack down on password sharing.

On the other hand, NBC’s Peacock and CBS’s Paramount+ currently do not restrict account sharing. Peacock mentions that its service and content should not be shared beyond the household unless otherwise permitted by the subscription plan. Paramount+ claims that password sharing is not a significant obstacle to its growth efforts, but it will continue to monitor the situation.

Amazon’s Prime benefits, including Prime Video, can be shared with members of an Amazon Household without explicitly requiring them to live within the same physical household. Apple allows sharing its streaming service, Apple TV+, with up to five family members, but it does not explicitly prohibit sharing with members outside the household.

While some streaming services have not yet cracked down on password sharing, it doesn’t mean they won’t in the future. Netflix, which once regarded account sharing as “sharing a password” and something to be lived with, has set an example for the industry.

However, the Wall Street Journal reported a rise in customer cancellations across major streaming platforms, reaching over 6 percent in November. Industry experts suggest that consumers should expect price hikes, password-sharing limits, and the introduction of ad-supported options as streaming services navigate new challenges.