Streaming giant Netflix says its crackdown on users who share their accounts with people outside of their immediate household will hit Australia "in the coming months".
It comes as the company says more than 100 million households have shared passwords with people they do not live with.
Let's take a look at how the changes will impact Australian users, and how things got to this point.
So what exactly is Netflix doing?
The company is changing its service so it is more difficult for account owners to share a Netflix account with people who do not live in the same home.
It is a big move for the company because it is still common for people in Australia who don't live together to share their streaming-service passwords — despite it technically being against streaming companies' terms of service agreements.
Netflix accounts will remain shareable within a household, but soon an extra fee will need to be paid if an account owner wants to share their account with people outside of their household.
Netflix rolled out the changes in Canada, New Zealand, Portugal and Spain today, and will launch them in Australia soon.
What does it mean for my Netflix account?
Let's take a look at how things compare for account owners and other account users.
If you are a Netflix account owner:
When the changes come to Australia you will need to set a primary location for your Netflix account, which the company says ensures "that anyone who lives in their household" can use the service.
If you have a Standard or Premium Netflix plan and want to add people who do not live with you to your account, you will need to pay an extra fee to add up to two subaccounts.
In New Zealand the fee is $NZ7.99 ($7.27) a month per subaccount, so it is expected to cost roughly the same amount in Australia.
Netflix is calling this paid sharing, and while the company says it won't automatically charge you if you share your account with someone who doesn't live with you, that person will likely be told to create their own account or join yours for the extra fee.
If you are travelling and want to sign in to Netflix on a TV or device which is not yours, it is believed you will be able to request a temporary code from the service when signing in. This code will be sent to the account owner, and when typed into the device it will provide access to the account for up to seven consecutive days.
The company says if the primary account holder is travelling or lives between different homes, they shouldn't need to verify their personal devices unless they are away from their primary location "for an extended period of time".
Within a household, the number of devices that are allowed to stream Netflix simultaneously will still depend on which level of subscription the account holder has — the tiers allow between one and four devices to be streaming at any one time.
If you are using the Netflix account of someone you don't live with:
After the changes take effect for Australian users, you might get a message when you log in asking you to create your own account or join someone else's using paid sharing.
Netflix says you will be able to transfer your profile — containing things like your watchlist and streaming history — if you start your own membership or join someone else's account.
Why is Netflix preventing free account sharing now?
In its earnings report for the final quarter of 2022, Netflix said it had seen "widespread account sharing" involving more than 100 million households.
The company said account sharing undermined its "long-term ability to invest in and improve Netflix" and to build its business.
Netflix said it anticipated the widespread introduction of paid sharing would see some people cancel their accounts, with fewer people expected to join the service in 2023's first quarter compared with its second.
"We expect some cancel reaction in each market when we roll out paid sharing, which impacts near-term member growth," the company wrote.
"But as borrower households begin to activate their own standalone accounts and extra member accounts are added, we expect to see improved overall revenue, which is our goal with all plan and pricing changes."
The company's decision to introduce paid sharing has not gone over well with some users, who have voiced their frustrations on social media.
Netflix said it recognised the end of free account sharing was "a change for members" who were used to sharing their account outside of their household, and it had worked hard to improve its service.
How does Netflix know if an account is being shared outside a household?
Netflix says it uses information from things such as "IP addresses, device IDs, and account activity from devices signed into the Netflix account" to detect whether devices are part of the same household.
If it finds an issue with any of the devices using an account, Netflix says account holders will be notified.
"When a device outside of your household signs in to an account or is used persistently, we may ask you to verify that device before it can be used to watch Netflix or switch your Netflix household," the company said.
"We do this to confirm that the device using the account is authorised to do so."
Is password sharing illegal in Australia?
The Attorney-General's Department says the legality of password sharing is mostly defined by streaming companies' service agreements.
"The legal status of password sharing under Australian law largely depends on the terms of service of the relevant streaming provider," a spokesperson said.
"It is a commercial decision for subscription service providers to determine what action, if any, they will take in response to instances of password/account sharing, including any potential legal action in relation to copyright infringement."
How did we get here?
Netflix has been trying to limit account sharing for years, and its efforts have escalated recently.
In 2022 the company carried out a test with customers in Latin America, who were given the option of paying a fee to add subaccounts for people they didn't live with for about $4 per month.
Netflix said it saw a reduction in users during the test when some users left the service, but engagement returned over time.
In November 2022, the company also launched a cheaper ad-supported version of its service, which is believed to have helped it weather increasing competition and keep consumers as they faced rising inflation.
In January the company said it gained 7.7 million subscribers between October and December 2022. That was after it lost 1.2 million subscribers in the first half of 2022, marking the first time in 10 years Netflix memberships went backwards.