Netflix will annoy you into paying up for your account

With Netflix’s crackdown on password sharing set to begin in the coming months, many are still wondering what it is going to look like. It seems that the plan is to keep bothering you with prompts to verify devices – until you run out of patience.

Reviews of the test drive in Latin America are mixed but Netflix is forging ahead with its plan to start cracking down on subscribers – especially in the US and Canada – who share their passwords with users not living under the same roof.

Netflix has long said this wasn’t right, but the company’s approach was traditionally lax as it was building up buzz – once, it even said in a tweet that “love is sharing a password.”

Well, since Netflix apparently needs money for new projects, love is paying up now. If you’re a so-called freeloader who consumes content on a primary user’s account, Netflix wants you to either open your own account or charge the account owner a few bucks more each month.

Of course, many users are simply fuming and threatening to quit watching altogether – the choice is abundant, after all. However, details of how exactly the crackdown will work are yet to be discovered – for now, it looks like crackdown is too ambitious a word.

Still, what’s already clear is that Netflix will become much more annoying to its customers, especially the ones who save cash by sharing their accounts and dividing the monthly fee. How?

Emails, codes, verifications

It might feel gentle at the beginning. To detect which users should count as “household” members who live together, Netflix will use a person’s geographical location as determined by the IP address of the device and its ID.

The company says all users – freeloaders or not – who travel will continue to be able to watch content on mobile devices such as smartphones, tablets, or laptops. This means that the crackdown is primarily targeting account borrowers who watch Netflix on their smart TVs at home.

In essence, if you’re watching on a TV, Netflix will, or at least should, be able to know exactly where you are. Netflix says on its website that it already “uses information such as IP addresses, device IDs, and account activity from devices signed into the Netflix account” to detect the necessary information about viewers.

But what if you’re not living with the primary owner of the account, but you’re sharing it with the said user’s permission? Here’s where it gets more complicated.

If Netflix sees that someone signs into the account from a device that is not associated with your “househol,”, or if it detects that the account is accessed persistently from another location, it will send a notification to the primary account owner and ask her to verify the device.

The prompt is a link sent to the email address or phone number of the primary subscriber. It opens a page with a 4-digit verification code that needs to be entered into the presumed freeloader’s account within 15 minutes.

Obviously, it’s irritating – would you want to bother, for example, your mate who owns the account and kindly lets you share it with requests to send you the code that he or she just received? Netflix says this kind of verification “may be required periodically.”

More steps in the future?

There’s an interesting catch, though – a simple workaround. One can create a shared Gmail account – this way, all users on the same account would get the verification requests.

It should also be possible to set email forwarding so that the prompts from Netflix to enter verification codes would travel onward to other members of the account at the same time. If possible, unlinking your phone number from the account would also be smart.

Mind you, in the Latin America trials, if a change in location of an account being used is detected for more than two weeks, the holder receives a notification giving them the option of changing their household address or paying a fee to add the new address.

This is not yet publicly discussed as an option for the US market, but it seems like a logical next step – Netflix says around 100 million people watch its content on someone else’s account, forcing the company to consider more extreme monetization opportunities.

In Costa Rica, Chile, Peru, Argentina, El Salvador, Guatemala, Honduras, and the Dominican Republic, the fee for every extra “household” is $2.99.

Users will not be automatically charged even if wrongdoing is detected. That has led some observers to question how effective the crackdown will truly be.

Common sense says that Netflix will present its viewers with two simple choices. The company cannot simply charge you more without your permission or knowledge, so one day, you might be asked to either pay (or make your account borrowers pay) or leave the premises.

Going soft for now

For now, Netflix remains quite vague. Maybe because, just like in Latin America, the company is expecting “some cancel reaction.” It says users will not be automatically charged even if wrongdoing is detected. That has led some observers to question how effective the crackdown will truly be.

Besides, at least in Peru, for example, members found that if they simply called customer service and told them that someone from their household was using the service in a different location, they could access the account with a verification code without having to pay extra.

Maybe Netflix will punish the violators by flooding them with even more emails. It could be a bit like what YouTube has been doing – it keeps showing more annoying ads in hopes that users will jump to its cleaner paid Premium service.

Or maybe, the experiment will not work out in the end – especially if Netflix sees subscribers canceling en masse.

Neil Patel, an investor at The Motley Fool, a private financial and investing advice company, asked recently: “Would the company rather have someone who doesn't pay for the service but still watches it? Or someone who doesn't watch the service at all? Because it costs virtually nothing to serve an additional customer, my belief is that Netflix would want to choose the former.”