Despite saying, “We are not working with/partnering with Synamedia” back in January, Greg Peters, chief product officer at Netflix, has now said that his company is working to clamp down on people who are sharing login details.
The problem with password sharing
It might seem harmless, but password sharing is a major headache for the video streaming services. According to CordCutting, an estimated 24 million people are using Netflix without paying for it.
That means that around 15% of people of the people using Netflix don’t have their own Netflix account. It also means that theoretically, Netflix is missing out on subscriptions worth $2.3 billion each year. That’s a lot of money.
Why hasn’t Netflix already acted?
Well, for a start, that $2.3 billion isn’t actually the extra money Netflix would earn if everyone who was using someone else’s login details decided to pay for a Netflix account of their own. It’s quite possible that most of those people wouldn’t pay for their own subscription if password sharing was no longer possible.
There’s also the problem of proving that someone is sharing login details. And even if you can prove that, it’d almost certainly be more trouble than it was worth to attempt to prosecute.
How does Synamedia’s system work?
Synamedia launched its AI-based system at this year’s CES event in Las Vegas. It analyses customer behaviour to identify where an account may be being shared.
As an example, the system can detect where the customer is logging in. If the customer logs in at a different location shortly after having logged in somewhere else, it’s possible that it’s not the same person accessing the service.
Netflix has not confirmed that it will be using Synamedia’s system but at the company’s Q3 2019 earnings announcement Greg Peters said that Netflix is looking at its options to see how it can address the password sharing issue without alienating its customers.
It looks like it’ll only be a matter of time before Netflix implements some sort of system to prevent, or at least minimise the number of people who are using its video streaming service without paying for a subscription.
Do I need to panic?
Not at the moment. It’s unlikely that Netflix will start terminating people’s accounts or taking people to court because that’d be bad for their image.
What’s more likely is that if they suspect that someone’s sharing their account details, they will suggest that the customer upgrades their account to a premium account where password sharing is permitted.
Netflix currently offers two premium accounts. One of the premium accounts allows you to share your account with one other person and the other lets you share your account with three other people.