Netflix has held talks with UK telecom groups that provide the streaming group’s service ahead of a crackdown on account sharing expected later this month.
The US group, which said free use of its platform undermined its ability to invest in new TV shows and movies, plans to start warning customers about account sharing violations in the coming weeks, according to people who said familiar with the situation.
Telecommunications groups using Netflix as part of the bundled TV content they held meetings last week over planned warnings, people familiar with the talks said. Companies such as Sky, BT, Virgin Media and TalkTalk offer Netflix as part of bundled deals on broadband and TV content.
But those close to the talks said there was a risk of complaints from some subscribers, many of whom have become accustomed to sharing their account details with family and friends, an activity the company had previously turned a blind eye to. One person described it as a “good partner” for groups that offer the service as part of their subscriptions.
The telecom companies’ call centers are likely to respond to questions and complaints once the plans are implemented, according to a person familiar with the issue, meaning they needed to work closely with Netflix.
The company had been trying to ensure its partners were kept informed of its plans as they proceeded in recent months, a person close to the talks added.
Once the crackdown on account sharing begins, customers will be encouraged to set a primary location that will mean anyone living in their household can use their Netflix account, according to the people.
If the account holder detects that the account is being used outside of that primary location, they will receive an email about the extra usage, with topic-related “interstitials” inserted at the start of scheduling.
The alerts will roll out to most of its major markets, including the US and UK, in a move to prevent non-subscribers from freely using customers’ passwords and turn them into paying customers instead.
Netflix in April estimated that more than 100 million households worldwide shared accounts with other users.
The company was forced to do it delay the planned implementation of its crackdown on the allocation of accounts from the first to the second quarter of the year.
After tightening measures in Canada, New Zealand, Spain and Portugal in the first quarter, Netflix said in a letter to shareholders that its new “paid sharing” service – where customers share their account with people outside of one’s family for a fee – led to a “cancel reaction” which resulted in lower membership growth.
But Netflix said that after the initial abandonment, subscribers soon began adding “extra member” accounts, boosting revenue and convincing management it was taking the “right approach.”
In Canada, the paid subscriber base was now higher than before the paid sharing service launched, the company said.
THE streaming service it’s looking to improve profitability in the face of growing competition from rivals like Disney and Apple. Netflix declined to comment.
Additional reporting by Christopher Grimes in Los Angeles
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