Netflix Tests a Clampdown on Password Sharing

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“I’m not convinced this is an all-out assault,” said Michael D. Smith, a professor of information technology and marketing at Carnegie Mellon University in Pittsburgh. “It could be a warning shot over the bow of some pirates.”

But, he said, merely reminding people that password sharing is not allowed could persuade some people to buy a subscription, rather than continue to use the one their friend of relative bought.

“Even minor signals that piracy isn’t acceptable could change people’s behavior,” he said.

The test comes as Netflix viewership has drastically risen during the coronavirus pandemic.

The company said in January that it had added 8.5 million customers in the fourth quarter, for a total of 203.6 million paying subscribers by the end of 2020. The company has about 66 million customers in the United States and is anticipated adding six million total subscribers in the first three months of this year.

Netflix had earlier hinted that it was looking at ways to stop password sharing. Gregory K. Peters, the company’s chief product officer, said during a call to review the company’s earnings in October 2019 that Netflix was “looking at the situation.”

“We’ll see, again, those consumer-friendly ways to push on the edges of that,” Mr. Peters said, adding that the company had “no big plans to announce at this point.”

Professor Smith said the company clearly loses a significant amount of revenue through people using the service but not paying for it.

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