With Netflix’s yearly price hikes and severe lack of sitcoms, account sharing can look a lot more appealing than a monthly subscription fee. But how does Netflix feel about account sharing, and why hasn’t the company stopped the practice?

Everybody Shares a Netflix Account

When we say “account sharing,” we aren’t talking about sharing an account with your family. We’re talking about a practice that violates Netflix’s Terms of Use: the sharing of an account with friends, neighbors, internet strangers, and other grown adults that you don’t live with. This practice is widespread; it’s practically a touchstone of modern culture. With every nasty breakup, awkward move-in, or sudden bout of friendship-drama, somebody’s gaining or losing a free Netflix profile.

Twenty-four million people use a Netflix account that they don’t pay for according to an estimate from Cordcutting.com. That’s a lot of people. If an estimated 24 million people were using your product for free, wouldn’t you get a little upset?

You’ve probably gathered this from experience, but Netflix doesn’t care about account sharing. Or, at least, the company doesn’t do anything about it. Its Terms of Use explicitly prohibit the ubiquitous practice, but that rule is never enforced. Even the most blatant forms of account sharing go unpunished. You can uninhibitedly share your Netflix login info with people who live across the country or even people who live in another continent. We’ve never heard of Netflix terminating an account because it was being shared.

But Netflix must know that it has an account sharing problem. Again, it’s practically a part of our culture. So how is Netflix dealing with account sharing and exactly how much money is it losing?

If You Can’t Beat ‘Em, Offer Family Plans

Netflix’s Terms of Use specifically bars the use of account sharing, so why doesn’t the website punish account sharers? In the words of Netflix CEO Reed Hastings, “password sharing is something you have to learn to live with, because there’s so much legitimate password sharing, like you sharing with your spouse.” Netflix is “doing fine as is,” without hunting down account sharers.

Punishing account sharers isn’t worth the risk. If the company writes an algorithm to detect account sharers, there’s a chance that families would be mistakenly banned or suspended for sharing an account. That’s just bad PR.

So, like a skilled fighter, Netflix chooses to pivot. The streaming service has made account sharing more appealing by adding a “profiles” feature. Netflix also offers premium plans that allow watching Netflix on up to four devices at a time. These family plans are beneficial for account sharers, and they give users a reason to pay Netflix an extra $ 7 a month.

While it’s fair to argue that family plans and profiles exist for actual family use, it’s hard to deny the fact that these features make account sharing super easy—even for the one person who’s paying for the account.

Account Sharing is Largely Beneficial for Netflix

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