It's been a cost-saving technique for Netflix subscribers to share their password so others would share the cost as well, cutting their streaming service bill to half or maybe even by five. By early 2023, that technique will no longer be viable.

Password Sharing for a Price

With Netflix experiencing its first loss in subscribers in the past decade, they are looking into ways to increase revenue. Unfortunately for those who depend on generous Netflix password providers, the streaming service can no longer turn a blind eye.

The company has been aware of password sharing for some time, but the previous rises in subscriptions have put the issue at bay. Now that Netflix is in troubled waters, CEO Reed Hasting decided to finally pay attention, as mentioned in MacRumors.

Sharing accounts with people outside the household will be reflected in the bill of the main account holder, costing them an extra charge, The add-on payment has already been tested in select Latin-America countries.

The primary account owner will have to provide a verification code should a household outsider use their account. The code will be asked consistently of those who access the account outside of the household, to make sure that the additional charge is paid.

There's a different option for those who share passwords with others. Netflix may launch an ad-tier plan for $6.99 for viewers outside the primary account's IP address. The accounts will be linked, but users outside the household will sign up for a new account.

Read Also: Is Netflix Considering Selling Its Original Shows to Other Networks

Taking Password Sharing Seriously

Some may not be aware of this, but password sharing is actually a violation of Netflix's terms of service. The punishment for the violation could lead to a user's account being suspended or deleted altogether. 

According to some reports, it's even possible for people who still practice this cost-saving method to land in jail or pay a fine. The UK Intellectual Property Office claims that password sharing is a violation of copyright law, as mentioned in Giant Freaking Robot.

The IPO removed the policy about Netflix subscribers sharing their passwords. However, a spokesperson claims that they still consider it a violation. Netflix has not announced that it would seek legal action against password sharing, so far.

Digital, a research firm, estimated that around four million Netflix accounts from the UK share their passwords. Although this is a huge source of revenue that Netflix is missing out on, I doubt that the jails will be able to fit four million account holders should they pursue legal action.

Besides, there is a lot of legal red tape to go through before a person is prosecuted for the ridiculous charge. The police will have to investigate the matters first before they can even start the paperwork to send sue you.

Regardless, Netflix is well on its way to implementing new policies to avoid password sharing. This is one of many ways that Netflix will attempt to increase the revenue it lost this year.

Related: Netflix Issues Extra Charges for Password Sharing Beyond Household