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Netflix is welcoming the new year with some big changes. The streaming giant brought some unwelcome news earlier this week when reports emerged that they would be cracking down on password sharing for real by implementing new guidelines.

The new rules essentially block anyone outside of a single household from using the same Netflix account, meaning everyone linked to one account must be in the same location as the primary account holder.

Predictably, this was met with less-than-enthusiac reception on Twitter, where people predicted the shift would cost Netflix subscribers, while others called out the streamer for its confusing new rules.

Wondering what, exactly, is going on with all of the password sharing talk? Here’s everything we know about Netflix’s biggest change in years, including when it will go into effect and why it’s even starting in the first place.

WHY IS NETFLIX ANTI-PASSWORD SHARING?

The answer is simply, really — it all boils down to money. The company is cracking down on password sharing in an effort to gain more subscribers. With multiple people sharing one account outside of a single household, Netflix is losing out on profits it could make if people who didn’t live together each had their own, separate account.

Netflix previously shared in an earnings report last year that over 100 million households share an account, which they noted “undermines our long term ability to invest in and improve Netflix, as well as build our business.”

The company then previewed two new changes, explaining in a March 2022 blog post that they would be rolling out a Profile Transfer option — which allows existing users to move their Netflix profile to a separate, paid account if they are linked to a primary household — and an Extra Member feature, which allows people who do not live in the same household to share an account for an added fee.

According to Quartz, Netflix could gain $1.6 billion from password sharing fees alone, once the new changes go into effect.

WHEN IS NETFLIX STOPPING PASSWORD SHARING? WHEN DOES NETFLIX PASSWORD SHARING END?

The rules detailing Netflix’s new password sharing policy leaked earlier this week, but the good news is that they don’t go into effect just yet. The guidelines reported by The Streamable on Tuesday (Jan. 31) only currently apply in certain countries, the U.S. excluded.

Netflix told USA Today on Thursday (Feb. 2), “For a brief time yesterday, a help center article containing information that is only applicable to Chile, Costa Rica, and Peru, went live in other countries. We have since updated it.”

Unfortunately, time is running out for U.S. customers, who only have a month or two left to enjoy their shared Netflix accounts. The company plans to implement their new password sharing rules by the end of the first quarter, likely by March 31.

WHAT ARE NETFLIX’S NEW PASSWORD SHARING RULES?

Under Netflix’s new rules, people who do not live in the same household cannot share a Netflix account (this was always the case, but now Netflix is really cracking down). The big change coming is device verification, which will prompt users outside of a household to verify the device they are using to watch Netflix.

The primary account holder will have to set a primary location for their Netflix account, and users outside of that location will be prompted to confirm their device with a code only accessible to the primary account holder.

Netflix will send the account holder an email containing a four-digit code, which can be used to verify the device outside of their household. The code expires after 15 minutes, per CNBC.

Anyone trying to mooch off of a Netflix account that isn’t their own will be automatically identified through the Wi-Fi they’re using — Netflix will flag users that are trying to stream content on an account that is not connected to the same Wi-Fi as their primary location.

HOW DOES NETFLIX KNOW YOUR HOME WIFI NETWORK?

Wi-Fi is a key part of Netflix’s new password sharing plan. The streamer plans to use “IP addresses, device IDs and account activity from devices logged in to the same account” to determine which users are outside of a primary household, according to CNET.

Netflix will reportedly ask users to verify that they live in the same household as the primary account holder every 31 days, per Quartz. Users will have to log into Netflix and stream something on their device once a month, which must be connected to the same Wi-Fi network as the primary account holder.

Traveling? Netflix has a workaround. The streamer will provide primary account holders a code to use to stream Netflix outside of their home, but it will only be valid for seven days.

CAN YOU GET AROUND NETFLIX PASSWORD SHARING?

Technically yes, but it will cost you. Users can still access a Netflix account outside of their home by becoming an extra member. Netflix has not officially announced cost plans for the feature, but customers outside of the U.S. can pay to keep additional members outside of their home on their account.

CNET reports that “each extra member subaccount in the U.S. would cost between about $3.50 and $4,” if Netflix sticks to the same model there that they’ve used abroad.