To increase subscriptions, streaming giant Netflix (NASDAQ:NFLX) is cracking down on the sharing of passwords.
Netflix has announced that it is implementing a new policy that will prompt people to sign up for a separate account if they aren’t watching the streaming service with a paying subscriber. The message reads: “If you don’t live with the owner of this account, you need your own account to keep watching.”
In a written statement, the company said: “This test is designed to help ensure that people using Netflix accounts are authorized to do so.”
Currently, about 33% of all Netflix users share their password with at least one other person, according to the company. Netflix’s basic plan costs $8.99 per month. The company’s standard plan is $13.99 per month, which allows users to watch Netflix on two screens at the same time.
Historically, Netflix hasn’t done much to stop password-sharing, as strong growth in subscriber numbers and its stock price offset any concerns about lost revenue.
Netflix announced earlier this year it topped 200 million global subscribers, but shares have underperformed the S&P 500 year-to-date as investors have moved away from growth stocks.
Netflix also faces growing competition from a host of newer streaming services, including Disney+ (NYSE:DIS), AT&T’s (NYSE:T) HBO Max, NBCUniversal’s (NASDAQ:CMCSA) Peacock and ViacomCBS’s (NASDAQ:VIAC) Paramount+.