Netflix starts crackdown on password sharing

The decision from the streaming website comes after the company experienced a 24 percent increase in annual revenue last year, with revenue now exceeding $25 billion.

"With 8.5m paid net additions in Q4, we crossed the 200m paid memberships mark. For the full year, we added a record 37m paid memberships, achieved $25 billion in annual revenue (+24% year over year) and grew operating profit 76% to $4.6 billion," the company stated in a letter to shareholders released in January.

Online streaming services saw a large bump in usership during the coronavirus pandemic as people from around the world were forced into their homes to avoid the deadly virus. However, as the coronavirus vaccine is rolled out, it is unclear if this bump will last for the companies.

The decision to crack down on password sharing has been in the works for years, with product chief Greg Peters stating in October of 2019 that the company will "continue to look at the [password sharing] situation and we'll see those consumer-friendly ways to push on the edge of that."

Peters at the time also said that the company had "no big plans" to pursue the issue, however.

Netflix users who do not own the account they are using now receive a message telling them to "[start] your own Netflix for free today. If you don't live with the owner of this account, you need your own account to keep watching. Join Free for 30 Days."

The notice states that if the user is, in fact, the owner of the account, then they can send a verification email or text to confirm their identity.

"This test is designed to help ensure that people using Netflix accounts are authorized to do so," a spokesman for the company said.

Once dominant in the online streaming industry, Netflix now faces stiff competition from companies such as Amazon, Disney, and Hulu.