Netflix is testing a feature that asks viewers to verify that they share a household with the account holder, the company said on Thursday, a move that could lead to a clampdown on sharing of passwords.
A small number of Netflix users are receiving a message asking them to confirm they live with the account owner by entering details from a text message or email sent to the owner.
‘If you don’t live with the owner of this account, you need your own account to keep watching,’ the message says.
Users are then prompted to use a code texted or emailed to the account owner to continue. Viewers can delay the verification and keep watching Netflix.
But the message may reappear when they open Netflix again, and eventually they could be required to open a new account to continue streaming.
‘This test is designed to help ensure that people using Netflix accounts are authorised to do so,’ a spokesperson for the multi-billion dollar firm said.
The alert, which is being shown to users ‘in a number of countries’ came after Netflix recently announced a hike in fees, now in effect for users.
The cost of of a standard account has increased from £8.99 to £9.99 ($12.99 to $13.99) a month and a premium account from £11.99 to £13.99 ($15.99 to $17.99), but its basic plan remains at £5.99 ($8.99).
According to a 2019 study, Netflix may be losing out on a whopping $192 million (£138 million) worth of revenue each month from password sharing.
The message reads: ‘Start your own Netflix for free today.’ Netflix asks ‘Is this your account?’ and ‘We’ll send you a verification code’ with three options – ‘Email Code’, ‘Text Code’ and ‘Verify Later’. Viewers can delay the verification and keep watching Netflix. But the message may reappear when they open Netflix again
NETFLIX USERS SLAM ‘GREEDY’ PRICE HIKE
Netflix users have slammed the ‘greed’ of the streaming giant for hiking subscription fees by up to £24-a-year.
The firm announced it was increasing its standard package – which allows two screens to access an account, as well as HD – by £1 per month, from £8.99 to £9.99, in January.
The premium package – providing four-screen access per account and Ultra HD – is bumped up by £2, from £11.99 to £13.99.
Netflix said the price hikes are essential to reflect the ‘significant investments’ it has made in new TV shows and films.
However, the move has angered many, with users rushing to vent their frustration on social media.
The number of households in the UK subscribing to Netflix grew to reach more than 15 million in the third quarter of 2020, according to Statista.
Netflix – which is known for hit shows like The Crown, Bridgerton, The Queen’s Gambit and Black Mirror – announced the price hikes back in October for new subscribers, while existing subscribers saw their fees increase in February.
The service lets users create multiple profiles within an account – but terms and conditions state that they should be people in the same household.
Netflix confirmed to MailOnline that this new message is a test and therefore not everyone will see it when they open the app.
It’s being tested in a number of countries, which Netflix wouldn’t disclose. The firm plans to evaluate the results of the test before making any other decisions, a spokesperson told MailOnline.
The message, which appears when users open the app, reads: ‘Start your own Netflix for free today.’ Under that it says ‘If you don’t live with the owner of this account, you need your own account to keep watching.’
A button underneath says ‘Join free for 30 Days’ – which is the firm’s window for new subscribers before they start having to pay.
Under the button it asks ‘Is this your account?’ and ‘We’ll send you a verification code’ with three options – ‘Email Code’, ‘Text Code’ and ‘Verify Later’, for people who want to put off the issue.
Netflix, the world’s largest streaming service with 200 million global subscribers, constantly tests new features with users and it is unclear if the household verification requirement will be implemented more widely.
The Netflix terms of service say that users of an account must live in the same household, though the company and other streaming services have declined to broadly crack down on sharing.
Netflix has historically ignored password sharing, since strong growth in subscribers and the company’s steady stock price have offset concerns about lost revenue.
Netflix last month announced last month the cost of of a standard subscription would be increasing from £8.99 to £9.99 a month. Now it’s testing a feature that hopes to reduce password sharing, which means lost revenue.
But the site now faces increased competition from new streaming services, including Disney+ – which also recently boosted its monthly price to £7.99 and added a new channel, Star.
Other competition is coming from AT&T’s HBO Max, NBCUniversal’s Peacock and ViacomCBS’s Paramount+, and in the UK Britbox and Now TV.
Research firm Magid determined about 33 per cent of Netflix users share their passwords with at least one other person.
Netflix launches hundreds of tests yearly with select customers, according to the company headquartered in Los Gatos, California.
This trial may not lead to a larger crackdown around password sharing and could be applied to uses involving account security in addition to password sharing policies.
Disgruntled Netflix customers took to social media to voice their discontent.
One said: ‘If Netflix is serious about password sharing, why [are] they okay with people using other’s email for signing up?’
Netflix users took to Twitter to voice their discontent about the clampdown on password sharing
NETFLIX HITS 200M SUBSCRIBERS
In January, Netflix announced it had reached 200 million subscribers worldwide.
The streaming giant added about 8.5 million paid subscribers in the quarter prior to reach 203 million, topping 200 million despite recent price hikes, its quarterly earning update showed.
‘Covid-19 has accelerated that big shift from linear to streaming entertainment,’ Netflix chief financial officer Spencer Neumann said on an earnings call.
‘So, the underlying long-term looks good.’
The company’s cash flow was so strong that it will no longer borrow money to pay for operations, and it is considering starting to buy back shares, according to a letter to investors.
Netflix shares jumped more than 12 per cent in after-market trades following the release.
Profits dipped to $542 million in the fourth quarter, compared with $587 million in the same period in 2019. But overall revenue in the quarter surged 21.5 percent to $6.6 billion.
For the full year, Netflix added a record 37 million paid memberships, according to the earnings report.
Another bitterly tweeted: ‘Netflix is mad about ppl sharing passwords as if there’s anything good to watch on there…’
Jake Moore, a cybersecurity specialist at ESET, highlighted the potential issues linked to password sharing.
Once you share your password with one person, whether it gets shared to someone else is out of your control, he pointed out.
‘We ran some research that found that over a quarter of people surveyed had willingly given away their passwords to someone else,’ Moore said.
‘This may not sound worrying when you know the other party with whom you are sharing the password, with but what if they pass it on to someone without thinking?
‘However, it is unrealistic to expect that people are going to stop sharing their accounts completely, so my advice would be to regularly change your passwords in order to flush out anyone who has gained access over the last year who shouldn’t have.
‘Creating complex passwords, combined with a password manager, will reduce your risk of compromise.’
Moore also noted the dangers of using the same password for multiple accounts on the same email address, as the risk of an account getting hacked increases.
Netflix co-founder and CEO Reed Hastings addressed password sharing during an earnings webcast in 2016.
‘Password sharing is something you have to learn to live with, because there’s so much legitimate password sharing, like you sharing with your spouse, with your kids,’ Hastings said. ‘So there’s no bright line, and we’re doing fine as is.’
In October 2019, chief product officer Greg Peters said Netflix was looking at the issue of password sharing, but that it had no ‘big plans to announce at this time in terms of doing something differently’.
Netflix, a multi-billion-dollar firm, is known for hits shows like The Crown, Bridgerton, The Queen’s Gambit. Pictured, Olivia Colman as Queen Elizabeth II in The Crown
A 2019 study conducted by Cordcutting.com found there were more than 40 million accounts for major streaming systems being ‘borrowed’ by non-paying users.
Yet a portion of those users said they would pay for their own account if they lost access, which represented more than $2.7 billion in potential revenue for streaming services.
Netflix shares have underperformed the S&P 500 index this year as investors moved away from growth stocks.
Co-Founder and director of Netflix Reed Hastings delivers a speech as he inaugurates the new offices of Netflix France, in Paris in January 2020. Hastings addressed password sharing during an earnings webcast in 2016, saying it ‘is something you have to learn to live with’
Netflix has underperformed the S&P index this year, but a strong stock price is one of the reasons the company normally has not been overly concerned about loss revenue from shared passwords
THE HISTORY OF NETFLIX PRICE HIKES
May 2014: Netflix announced an increase in its monthly fee for streaming movies and television shows from £5.99 to £6.99.
The price hike was immediate for new subscribers but was delayed for two years for its existing members.
But Netflix allowed subscribers to keep paying £5.99 a month if they opt for a lower-resolution ‘SD’ quality service.
May 2016: Netflix raises its monthly price for UK basic users from £5.99 to £7.49 a month.
A similar price change took place for US customers, who saw their subscription fee increase by $2 (around £1.40 at the time).
Anyone who signed up to Netflix when it launched in Britain would have received the standard package for £5.99 per month.
But in an email to subscribers Netflix wrote: ‘When we raised prices for new Netflix members in 2014, we kept your price the same for two years. Your special pricing is now ending and your new price will be £7.49 per month.’
October 2017: The company raised prices in both the UK and US for the first time in two years.
The standard package price increase by 50p to £7.99 per month.
The premium packagejumped to £9.99 a month, an increase of £1.
Netflix said at the time that the price change reflected the additional content added to its service.
May 2019: Netflix confirms that British customers will see the price of the standard tarriff increase from £7.99 to £8.99.
The premium tarriff was also bumped up by £2 to £11.99.
January 2021: Netflix hikes subscription fees for UK users as the country entered its third lockdown amid the coronavirus pandemic.
The standard package – which allows two screens to access an account, as well as HD – was raised by £1 per month, from £8.99 to £9.99.
The premium package – providing four-screen access per account and Ultra HD – is bumped up by £2, from £11.99 to £13.99.
Last year, Netflix revealed it would be starting to cancel user accounts that have been inactive for a year.
In an effort to ‘help’ users who haven’t been using the service to save their ‘hard earned cash’, it’s now eliminating unused accounts that are still billing the user.
Emails or app notifications will be sent to users who haven’t watched anything on their account in a year or more than two years, asking if they want to keep subscribing.
Any Netflix user who ignores the message and doesn’t confirm they want to keep using their account will automatically have their subscription cancelled.
MailOnline reveals how much major streaming services have raised costs in recent times
|Service||Price per month|
|Netflix (standard package)||£9.99|
|Amazon Prime Video||£7.99|
|Now TV (Entertainment pass)||£9.99|
As detailed above, Disney+ will now be £7.99 a month for new subscribers or £79.99 a year.
However, those who signed up last year and are due to have their subscription renewed will see no increase in the cost of their subscription until August.
The claimed reason for the hike is due to Disney+ creating Star, a hub within the streaming service for television and film content intended for an adult audience.
Included in the additional 75 shows are Desperate Housewives, Lost, Scandal and Atlanta.
Still on the service are hundreds of Disney films and TV shows as well as all of the Star Wars films, the Simpsons, the Marvel back catalogue and National Geographic shows.
It also now has a number of original TV shows and films including The Mandalorian and Soul.
Disney+ launched in the UK on March 24 last year, a day after the first national lockdown was announced, leading to an influx of subscribers.
The starting price was £5.99 a month or £59.99 for a year’s subscription.
One of the most popular streaming services around the world, Netflix has hiked its prices a couple of times.
As of this month, it increased its monthly subscription costs. The standard package, which allows users to watch on two screens and in high definition, rose from £8.99 per month to £9.99 per month – a hike of £12-a-year.
The premium package, where users can watch on four screens and has 4K and HD content, increased from £11.99 per month to £13.99 per month – a jump of £24-a-year.
Those on its basic package, which means users can only watch on one screen, stayed at £5.99 a month.
It said it had to put a price hike in place due to the number of new TV shows and films it was making.
Amazon Prime Video
Amazon Prime members get free next day delivery but also access to Prime Video which has thousands of films and boxsets to watch.
This includes Amazon original series such as Carnival Row and Jack Ryan.
It is currently £7.99 a month or £79 a year although students can get it for just £3.99 a month.
The price has not increased since launching in the UK and it is not known if there will be one in the near future.
Now TV is popular for those who want access to a section of Sky channels but don’t want to pay for all of them.
Its popular Entertainment Pass, which hosts shows from Sky One, Sky Atlantic, FOX, SyFy and Discovery, last saw an increase in September 2020 of 11.1 per cent with prices rising from £8.99 to £9.99 a month.
This was the second increase in recent times with Now TV putting up the price of the Entertainment Pass from £7.99 in April 2019.
The Sky Cinema pass, which offers access to the latest films on the 12 Sky Cinema channels, also jumped from £9.99 to £11.99 – a rise of 20 per cent.
Sky Sports has also seen a hike with a day pass rising from £6.99 two years ago to £9.99 as of 2021.
The Sky Sports week pass also went up to £14.99 from £12.99 in early 2019 when it had been £10.99 until February 2018.
However, now a month pass is only available which currently costs £33.99 or £5.99 for those on a mobile month plan.
Meanwhile, the Hayu Pass, which gives customers access to a number of reality TV shows, also saw a hike of 25 per cent increase, rising from £3.99 a month to £4.99.
Hayu can also be bought separately for the same price.
And what about the BBC licence fee?
The licence fee is compulsory for households who watch live television. Income from the licence is primarily used to fund the television, radio and online services of the BBC.
In May 2016, the Government announced the licence fee would rise with inflation for the first five years of the Charter period as of 1 April 2017.
Since April 2020, the annual cost is £157.50 for a colour licence and £53 for a black and white licence.
The annual TV licence fee is to increase by £1.50, from £157.50 to £159, from 1 April 2021. This is the equivalent of £13.12 per month.