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What will the password crackdown do to Netflix?

2022-01-19 12:42:43 ILLUSTRATIVE - Applications from streaming services Disney Plus, Amazon Prime Video, Apple TV, Videoland and Netflix on a phone. KOEN VAN WEEL (Photo by Koen van Weel / ANP MAG / ANP via AFP)

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Photo: AFP / Koen Van Weel

Netflix is cracking down on account sharing to stop multiple people accessing one account.

It estimates up to a hundred million subscribers have people outside their household piggy backing on their accounts for free.

To start, Netflix is bringing in restrictions in Canada, Portugal, Spain and Aotearoa.

The company will now require users to confirm their primary location, and blocking access from elsewhere – unless they are travelling or on holiday.

In the past Netflix encouraged sharing of accounts Gorilla Tech chief executive Paul Spain told Checkpoint.

“So, I don’t think they can blame anyone for being thieves.”

Part of the beauty of Netflix was that you could take it wherever you went, whether that was travelling to another country or staying in an Airbnb.

“They started out as a very well funded tech startup that had lots of money to spend on acquiring content, on acquiring a large customer base.

“Now they’re moving to a point where shareholders are expecting them to make a profit and so they’re trying to go through that challenging transition.”

It was a common transition for tech companies but not an easy one, he said.

“It will lose them a bunch of customers.”

But Spain said if Netflix didn’t have enough funds to make good content, it would also be a reason for people to unsubscribe.

“There is a level of people that have already unsubscribed, there’s that move to turn on and off the different video streaming services as and when appropriate.

“So, you might subscribe to one one month and then turn that off and subscribe to a different one depending on what the trending content is or what you’re interested in.”

There would always be work arounds for using Netflix from multiple places, Spain said.

One such work around would be a VPN that makes it look like you’re part of your own home network or family network when you’re not, he said.

Consumer NZ chief executive Jon Duffy said while people would be annoyed, Netflix was just enforcing rules that have always been in place.

And at the end of the day the sharing a password was a breach of Netflix’s terms and conditions, he said.

“Most people who do it would realise they are probably doing something a little bit cheeky. Let’s remember Netflix is a business. They are here to make a dollar and I guess they are looking at increasing their revenue.”

Netflix would have to compete hard to keep customers following the crack down on account sharing, Duffy said.

People would likely vote with their feet and choose a different streaming platform, he said.

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