James Hibberd - The Hollywood Reporter

Netflix is testing a new feature that could signal the start of an effort to crack down on password sharing.

Spotted by GammaWire, some viewers attempting to use somebody else's account are now being stopped by a screen that says, "If you don't live with the owner of this account, you need your own account to keep watching."

Netflix confirmed the new feature, which is getting a limited rollout at this time. "This test is designed to help ensure that people using Netflix accounts are authorized to do so," a Netflix spokesperson said.

In order to continue watching, the viewer is given the option of either verifying their identity (with a texted or emailed code to the account's owner), or opting to "verify later," which gives the viewer an unspecified additional amount of time to continue watching and later confirm they are a valid account user.

A source familiar with the tests said the extent of the rollout varies from country to country, but noted that one reason for the feature is a desire to help protect subscribers from security concerns that can arise from unauthorized use of their account.

The move potentially represents the beginning of a strategy shift by Netflix, which has historically not attempted to police password sharing. "Password sharing is something you have to learn to live with," Netflix CEO Reed Hastings declared in 2016, "because 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."

But THR senior editor Eriq Gardner predicted in 2019 that piracy crackdowns could be the next front in the streaming wars after the Alliance for Creativity and Entertainment announced a working group to reduce unauthorized access to content.

Describing the organization as "an antipiracy spinoff of the MPAA," Gardner noted, "The economics of streaming nearly demand it. Platforms are spending billions of dollars annually on both original content and rights to old shows. To become profitable, media companies will need to grow paid subscribers rapidly. AT&T boldly predicted 50 million subs for HBO Max by 2024. As part of that push, it may prove irresistible to target the more than one-fifth of young adults who, according to a Reuters/Ipsos poll, say they borrow passwords from people who do not live with them."

Speaking of HBO Max, the WarnerMedia streaming service likewise previously suggested it would not limit password sharing in the near term. The service currently sets a limit of five profiles per account, but it's unclear if users are cut off if they exceed that number.

"I don’t think we’re going to get to a punitive environment, lawsuits being filed against folks," WarnerMedia CEO John Stankey said in 2019. "But I do believe the technology’s starting to get better to start paying attention to extensive abuse — when we see 14 locations logged into HBO on a Sunday night with 16 different streams going, we’re aware of those things. As growth taps out, I think the industry will come up with a method that’s a bit more rigorous."