What Tech Brands Can Learn from Netflix’s Password-Sharing Blunder

Recently, Netflix announced its intention to crack down on password sharing. The company sent out a letter to investors informing them that account sharing undermined the company’s future. According to the letter, the widespread sharing of passwords among households negatively impacts its ability to invest in and improve its services. Netflix stated that over 100 million households were sharing passwords instead of creating their own accounts. The company then shared details of how it plans to enforce this policy. This new information about Netflix’s password-sharing crackdown started causing concern among its users.

Users and changes

Netflix recently updated its Help Center page in some countries. In those countries, users will have to connect to their primary Wi-Fi network at least once every 31 days. This way, they could ensure continued access to their account. Devices not associated with the primary location may be blocked unless the account owner pays for more members. This policy sparked outrage among global users. This prompted Netflix to claim that the policy was only applicable to specific countries, and was a mistake that was later corrected. The countries in question were Chile, Peru, and Costa Rica. A few days later, this updated information turned out to be incorrect as Canadian Netflix users started getting the prompt to log into their home Wi-Fi networks or risk getting blocked.

Public backlash

Netflix backtracked on the initial release of the update to say that the information was released by mistake. The controversy surrounding the policy, accidental or not, has caused social media users to announce their intention to cancel their accounts. The policy fails to take into account various scenarios. Scenarios like military families with one member deployed or families with a child in college. Individuals that move often also started complaining about the idea of a Netflix password sharing fee. Users also complained to Netflix about its habit of canceling popular shows too soon. Popular shows like 1899, Uncoupled, Tiny Pretty Things, and others, ended up canceled after a season or two. Netflix’s mistakes in their messaging resulted in a communications crisis.

Moving forward

Even if sharing the updated information was a simple mistake, it seems like the company wasn’t completely transparent. This is a crucial moment for Netflix, as it faces competition from a growing number of high-quality streaming companies. It’s imperative that the company clarifies the policy in detail. That includes if the policy will go into effect in the U.S. or not. The company will also have to clarify how it will address user privacy and accommodate customers who can’t log into a “home” Wi-Fi every 30 days. The way Netflix’s PR team handles this situation could have significant implications for its future.