Netflix’s Password Sharing Crackdown Causes Confusion: Report

Netflix’s first attempt at curbing password sharing is not garnering the company goodwill among international users.

The streaming giant has been experimenting with ways to prevent password sharing among extended friends and family networks in Peru, Chile and Costa Rica, where it has been rolling out extra charges to add someone outside of your household to an account.

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But as one could imagine, attempts to enact some sort of blanket policy for something as nebulous as “living together” have resulted in inconsistencies that have frustrated some customers, tech news outlet Rest of World reported on Wednesday. The publication surveyed more than a dozen Netflix subscribers in Peru and found that some were able to simply ignore the new regulations without consequence, while others were never even notified of the change before they were charged. Customers put into the beta-testing program also were not uniformly made aware of their participation, adding to the confusion about how the analytics-reliant streamer defines a household and chooses who to charge.

And it’s not just the users who are confused: A customer service representative for Netflix reported that colleagues have not been properly informed about what to tell customers inquiring into the policy update. A Netflix representative confirmed some of the details in the Rest of World report, noting that the test charges among subscribers puts an emphasis on physical location over family.

The results of the Latin American trial will likely inform how Netflix reduces password sharing on a larger scale. The company first announced the program in March, one year after it was found to be testing a different location-based password-sharing deterrent system in the U.S.

In Netflix’s disastrous first-quarter earnings report, it partially blamed its poor results and dwindling subscriber growth on password sharing, estimating that some 100 million households do not pay for their accounts. The policy shift has not been well received, with some believing that the proposed charges will lead to subscriber loss. This has already proven true in Peru, where Rest of World found that some subscribers are already canceling their accounts over the extra charges.