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[Yamila Comejo]

In February, Netflix announced it was going to begin cracking down on password sharing across households, starting in Canada, New Zealand, Portugal and Spain. Now, Texas State students have started to lose access to their shared Netflix accounts.

Account owners are now required to set up a primary location on their TV. Users can access the account on a phone or laptop while traveling, but streaming on a TV can only be done in the specified household.

While it is fair to say Netflix is addressing a real problem, this answer is not fair to college students who are not able to afford their own Netflix accounts. There must be a better solution that allows for more than one household on a single account.

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Netflix (NFLX.O) has defeated a lawsuit filed by shareholders in a federal court in California that accused the streaming entertainment company of hiding the extent to which account-sharing was hindering its growth.

Netflix lost around half of its value between January 2022, when it warned of weak subscriber growth, and April, when shares plunged after the company said account-sharing and competition had hampered new subscriptions.

The streaming company is limiting password sharing to people living in the same household. Account holders can add more people outside of the household for an extra $7.99 a month, or they can use the "transfer profile" feature to prompt extra users to make their own accounts that they pay for, Netflix said Tuesday.

In March of 2022, the company said that while it had encouraged account sharing in the past, with features such as profiles and multiple streams, the practices have been "impacting our ability to invest in great new TV and films for our members."

Netflix previously tested out paid password sharing in international markets such as Chile, Costa Rica and Peru in 2022. Earlier this year, the company expanded its paid account sharing into Canada, New Zealand, Portugal, Chile and Spain. The company said it had positive results in a letter to shareholders at the end of the first quarter of this year.

"As with Latin America, we see a cancel reaction in each market when we announce the news, which impacts near term member growth," it said. But as borrowers start to activate their own accounts and existing members add 'extra member' accounts, we see increased acquisition and revenue."

The purpose of sharing your Netflix email with everyone having access to the Netflix account is simple. They will be able to verify their devices immediately without worrying about missing that 15-minute window.

The method below works for sharing Netflix access inside the extended family, which might contain multiple households. Therefore, Netflix would see multiple IP addresses accessing the same account. You could also do it with a small group of friends sharing Netflix access.

At some point, you might want to rethink your Netflix password-sharing policy. You might want to pay for extra users having access to your account. Or you might just boot some of your family members and friends from your account. You can always set up new Netflix accounts for those family members.

In an earnings release on Wednesday, the streaming giant said it ended the last quarter with about 238 million subscribers, up 5.9 million since the company began restricting the sharing of accounts to a single household.

Netflix is battling to regain market share after losing nearly 1.2 million subscribers in the first six months of 2022, the first decline in a decade, after a viewership boom during the COVID-19 pandemic.

In November, Netflix announced the launch of a cheaper subscription service that includes advertisements as part of its effort to find new revenue sources amid intensifying competition among streaming services.

Netflix said in its earnings release that it would phase out its cheapest advertisement-free plan, in an apparent effort to encourage people to switch to pricier plans or plans that include advertisements.

A federal judge in California has dismissed a proposed class action lawsuit against Netflix filed by a Texas-based trust that claimed the streaming service misled investors about problems associated with password sharing between subscribers and freeloaders.

The lawsuit was filed in spring 2022 after Netflix reported lower-than-expected subscriber growth for two consecutive financial quarters. Its first miss came with Netflix's year-end earnings reported in January 2022, during which the company told investors that it was "optimistic" about its "long-term growth prospects," believing a then-forthcoming slate of new original programming would lure additional paid subscribers to the service.

The proposed class action sought damages on behalf of investors who purchased Netflix stock between October 2021 and April 2022, with the plaintiffs accusing Netflix of knowing that its business prospects were worse than the company led its existing and prospective investors to believe.

The case largely relied on anecdotal testimony supplied by two former Netflix employees, who said the company actively monitored password sharing between paying and non-paying customers, and that the practice inhibited Netflix's ability to grow its paying subscriber base.

Coincidentally, two months before the lawsuit was filed, a consumer study offered by Leichtman Research Group revealed around one-third of Netflix subscribers surveyed by the firm admitted to sharing their passwords with people who live outside their home. (Netflix allows customers to share their accounts only with people who live within the same residence.)

Last Friday, a federal judge overseeing the lawsuit affirmed a motion filed by Netflix to dismiss the case, saying the plaintiffs had not proven that Netflix knew about the detrimental effects of password-sharing and other ill points of its business for as long as they alleged. The judge also appeared swayed by Netflix officials that claimed the ill-effects of freeloaders on its service were outweighed by its popularity during the global coronavirus health pandemic, when more people signed up for the service to watch television while stuck at home.

The judge agreed to allow the plaintiffs to refile their case if they are able to substantiate their claims with additional evidence, according to Reuters. It isn't clear if the plaintiffs intend to refile their lawsuit.

Prior to the shareholder lawsuit Netflix said it would introduce various measures to end password sharing. A limited test of the strategy launched in several Latin American countries in early 2022. There, customers were offered the opportunity to pay an extra fee for the privilege of sharing their passwords beyond their homes.

The same measure was put into place in the United States and other countries in May 2023. Despite suggestions that the password-sharing crackdown could hurt its business, the company reported lower churn during the first full month that the strategy was in place domestically.

Last October, Netflix said its customer base rose to 247 million global paying subscribers, an increase of 8.8 million customers compared to its prior financial quarter. The figure caused Netflix's stock price to increase 12% in after-hours trading.

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