Netflix says a worldwide password crackdown is coming

If you’re still using your old flatmate's Netflix account, it may be time to start looking at getting your own.

The video-streaming platform hinted in its shareholder letter on Tuesday that a global crackdown on password-sharing is on its way.

Netflix said it estimates that more than 30 million US and Canadian households are using a shared password and that more than 100 million additional households around the world are probably using a shared password as well.

“This is a big opportunity as these households are already watching Netflix and enjoying our service,” the company wrote in its letter. “Sharing likely helped fuel our growth by getting more people using and enjoying Netflix. And we’ve always tried to make sharing within a member’s household easy, with features like profiles and multiple streams. While these have been very popular, they’ve created confusion about when and how Netflix can be shared with other households.”

In the letter, the streaming platform also referenced a recent pilot programme launched in March in Latin America around paid sharing features, including the option to pay to share Netflix outside of your own household.

Netflix reported a 6.4 per cent yearly drop in first-quarter net profit on Tuesday, meaning a loss of 200,000 subscribers between January and March.

The results prompted co-chief executive Reed Hastings to admit he is open to experimenting with lower-cost ad-supported packages. He said that he was "a big fan of the simplicity of subscription" but a "bigger fan of consumer choice".

"Allowing consumers who would like to have a lower price and are advertising-tolerant to get what they want makes a lot of sense," he said.

Despite the news, Netflix remains the biggest player in the sector. In 2021, it had a market share of more than 47 per cent, well ahead of second-placed Amazon Prime Video, according to Parrot Analytics.