Netflix testing a new feature to curtail password sharing

Netflix is testing a new feature that could prevent non-subscribers from piggybacking off of a friend's or family member's account and effectively stop people from sharing passwords for the streaming service.

The new feature is being tested among a small, random sample of customers worldwide. Selected users are being asked to confirm they either are — or live with — the account holder when they enter credentials to log in to the video streaming platform. A code is sent to the subscriber, which the user is then asked to provide. Test subjects also have the option to move past the prompt and verify the account later in order to continue streaming, or to create a new account. 

"This test is designed to help ensure that people using Netflix accounts are authorized to do so," a Netflix spokesperson told CBS MoneyWatch.

Currently, Netflix offers three different memberships — top-tier subscribers are permitted to share their accounts with up to three additional household members. 

A source familiar with Netflix's test said that it doesn't constitute a "crackdown," but that the company is searching for "consumer-friendly ways to address password-sharing and protect members in the process." 

The streaming platform also wants to protect its hundreds of millions of members against unauthorized use of their accounts. "The only way to rein that in is testing our way into this type of verification," the source said, adding that how Netflix may proceed remains "up in the air."

Netflix CEO Reed Hastings previously touched on password sharing without indicating any plans to take action. "Password sharing is something you have to learn to live with," he said in 2016. "There's so much legitimate password sharing, like you sharing with your spouse, with your kids, so there's no bright line, and we're doing fine as is."

Netflix has more than 200 million subscribers across the world and recently raised its prices as its popularity continued to grow during the coronavirus pandemic. Streaming plans cost between $9 and $18 per month.