Netflix is finally going after password sharing. Here’s how it’s likely to work

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Netflix surprised the world this week, saying it plans to finally address the rampant practice of password sharing.

More than 100 million households are using a shared password, Netflix said Tuesday, including 30 million in the U.S. and Canada.

But the video streamer doesn’t plan to simply freeze those shared accounts. Instead, the company will likely favor the setting of an extra fee for those accounts being used by multiple people outside of the home.

Netflix’s plan to capture that lost revenue would start with an alert being sent to account holders whose passwords are being used by other households.

“If you’ve got a sister, let’s say, that’s living in a different city, you want to share Netflix with her, that’s great,” said Chief Operating Officer Greg Peters during the company’s earnings conference call. “We’re not trying to shut down that sharing, but we’re going to ask you to pay a bit more to be able to share with her and so that she gets the benefit and the value of the service, but we also get the revenue associated with that viewing.”

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