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Netflix’s biggest hurdle to ending password sharing? Defining a ‘household’

Netflix is trialling a way to encourage people to get their own accounts and convert password-sharers into paying customers.

That’s easier said than done – even though the company is offering add-on subscriptions in certain countries that allow password sharers to piggy back on an existing subscribers account for a couple of quid.

The idea is to arrest the slide of users ditching the platform amid price hikes, increased competition and a perceived fatigue when it comes to Netflix’s original content line-up.

However, the trials in Costa Rica, Chile, and Peru aren’t going particularly well, according to a Rest of World report. It all comes down to differing definitions of what a household constitutes.

While it could be taken to mean a nuclear family – hence why so many grown kids share their parents accounts and vice versa – Netflix believes it has to be people who live under the same roof.

That’s it’s current target for converting password sharers, but it appears to be unenforceable right now. Many users in the test countries are simply ignoring the requests to validate their account, and continuing to be charged for just one subscription, even though they are sharing with multiple friends.

“While we started working on paid sharing over 18 months ago, we have been clear for five years that A Netflix account is for people who live together in a single household,” a Netflix spokesperson told Business Insider.

“The millions of members who are actively sharing an account in these countries have been notified by email but given the importance of this change, we are ramping up in-product notifications more slowly. We’re pleased with the response to date.”

Netflix is likely to face similar problems – perhaps even legal ones – when defining what constitutes a household. How Netflix’s efforts go down will probably inform other streaming services’ decisions to take similar action to crackdown on password sharing.

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