Netflix’s Password-Sharing Crackdown Comes to Canada

By Alex Kerai

Last updated 16 February 2023

WhistleOut fast facts

Password sharing has occurred for years among family members, ex-partners, and long-lost roommates.
After rolling back the initial password crackdown globally, Netflix is soft-launching the program in four more countries, including Canada.
The company lost 1.2 million global subscribers in the first two quarters of 2022, leading to new initiatives like prohibiting password sharing.
Netflix risks alienating more customers at a time when 25% of subscribers are thinking of leaving within the year.

Netflix's subscriber growth in Canada has plateaued at around 19 million viewers per month since 2020. Although the numbers are strong, and the company isn’t losing many subscribers here, Netflix is about to expand its controversial password-sharing crackdown to Canada next week.

Password sharing has been an under-the-radar accepted practice for a long time with streaming, but under the new rules, only people living under the same roof can share a Netflix account.

Netflix is requiring that users set their primary location on a TV using the Netflix app. It will verify your account and location. If you don't complete this process by February 21, Netflix will do it for you with your account details. However, if you do not use Netflix on a TV, the company has not set a process for verifying your location yet.

The bigger question will be if users will still be able to stream shows during their commute or in the office. The Netflix app has over 1 billion downloads on the Google Play store and ranks #7 in Entertainment apps on the Apple app store.

Netflix had been testing password-sharing rules in Latin America before announcing the expansion. The company was set to launch password sharing in the US, but reversed course and is launching only in Canada, New Zealand, Portugal, and Spain.

Netflix Canada subscribers will have to set a primary location for their account by February 21, 2023. Netflix says that more countries will be added in the coming months.

Canada is the first North American country facing the crackdown

Netflix lost nearly 1.2 million subscribers in the first two quarters of 2022, before rebounding and adding more than 2.4 million globally. But with the focus on the bottom line instead of subscriptions, the company is cutting down on people who share accounts and is hoping to gain a stronger foothold in the streaming wars.

So, in an effort to grow its global subscriber base, the company is cracking down on password sharing that, for many years, had been allowed — and even encouraged — by Netflix itself.

In fact, when Netflix accidentally updated its US Help Center page, it sparked outrage, and the company quickly backpedalled. A week later, it announced that Canada would be part of the next phase of testing on password sharing.

The move makes Canada the first North American country to participate in the new program—and is sparking backlash. Users are posting to TikTok with their cancellation notices, leaving Netflix behind after it instituted its one-household rule.

Customer outrage mirrors US consumers. A survey by Reviews.org found that 1 in 4 Netflix subscribers plan to leave the service in 2023.

Can Netflix weather the storm?

Yes. It’s still the most popular streaming service in Canada, with over 80% of Canadians using the platform. But the rising cost and password-sharing crackdown could change things in the years to come.

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