Netflix reveals how much password sharing actually costs them

Netflix has given an insight into just how much password sharing actually costs them – in short, it's a lot.

The streamer has faced heavy criticism in recent weeks amid its plans to prevent multiple people from using just one account.

As part of its crackdown, Netflix said in a recent letter to shareholders that subscribers would 'have the option to pay extra if they want to share Netflix with people they don't live with'.

But one of the biggest flaws in the new arrangement is that it involves users having to re-sign into their accounts on their home WiFi network every 31 days.

If you're unable to do so, you risk being locked out of your account.

While this is all well and good for many, what about the subscribers who travel for extended periods of time for work or live between two or more places?

Marcel de Grijs/Alamy Stock Photo

Although the streaming giant came up with a 'workaround' by offering the option to get a temporary login code, this only lasts for seven consecutive days.

Netflix users aren't too happy about the news, with many taking to social media to slam the platform for what they believe to be serious flaws in the new plans.

But as the company irons out the details, it has since shared an update on why it is taking these measures – and this is where the stats come in.

"We’ve always made it easy for people who live together to share their Netflix account with features like profiles and multiple streams," the streaming giant said.

"While these have been hugely popular, they’ve also created confusion about when and how you can share Netflix."

Netflix went on to say that right now, over 100 million households are sharing accounts, which it said is 'impacting our ability to invest in great new TV and films'.

To put this in perspective, if just one person person from each of those households started their own account at the basic subscription plan of $9.99, that's a whopping $999,000,000 extra per month.

Of course, some people will argue that Netflix has enough money - regardless of whether people are leeching off their mates/parents/exes or not.

And we should point out that this figure is not entirely accurate - it could be significantly higher if, say, three people from each account stopped leeching today and setup their own subscription.

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Or the figure could be lower, as anyone who lives in the same household can still share. And if they don't, they can now opt to setup a sub account.

In its announcement, the streaming service explained that anyone with a standard or premium account has the option to add an extra sub account for up to two people they don't live with.

After initially testing this option in Latin America, the company is now ready to roll out the initiative worldwide, starting this week in Canada, New Zealand, Portugal and Spain.

Users who go for this option will have to pay CAD$7.99 a month per person in Canada, NZD$7.99 in New Zealand, €3.99 in Portugal, and €5.99 in Spain.