What software businesses can learn from Netflix’s account sharing plan

Netflix’s recent announcement of its account restrictions brought account-sharing back into the mainstream conversation and with it strong reactions from customers. Account sharing is a real problem, and not just for Netflix which claims to have more than 100 million accounts who share their login with others. 

Outside of streaming, the rise of subscription software services has also led to more and more account sharing. Whether it’s a 20-person team using a team@company.com login or a group of friends sharing an online education platform, the proliferation of account sharing adds up to a more than $50 billion per year impact. 

Even with the changes being limited to selected regions, it is clear Netflix is still working on how to tackle the issue globally and will at some point in the future announce the next iteration of its plans. For the companies watching from the sidelines to see how account sharing is successfully addressed, there are plenty of lessons to be learned. 

Lesson 1: It doesn’t have to be a “crackdown” 

When tackling account sharing, it’s not about punishing your customers, it’s about showing someone who loves that product that they can have a better experience, better security, and more value. You want them to become happy paying customers, and ‘cracking down’ on them isn’t the best way to achieve that. There are so many benefits to having your own account: personalisation, everything is where you left it, and collaboration without everyone being called “team”. 

Having your own account is having your own place to call “home”. 

Lesson 2: Make it easy to be on the right track 

No one wants to start from a blank slate, so make it easy for your customers to actually set up their new account. Netflix has done a great job of making the move easy with tools to migrate accounts and keep your watch history. 

Enabling account holders to convert the people they are sharing with into sub-accounts means customers can continue using Netflix with little extra cost and no extra effort. However, it does mean customers have a more complex account to manage, which leads us to the third lesson. 

Lesson 3: Set clear expectations 

Subscription services need to make it easy and clear for people to understand what they can and shouldn’t do, use consistent terminology they will understand, have a model that ties an account to a person, and make it easy to understand how to invite others to use the product the right way.

One of the most confusing aspects of Netflix’s plan was the lack of definition of what a “household” is, and now it’s introducing household plus non-household users as one account. 

Change can be really difficult to communicate. Here are messaging guidelines we recommend for users you suspect are not the account owner, based on our customers who’ve successfully turned account sharers into individual accounts: 

1. Identify that you think they’re not the owner of the account 
2. Acknowledge that they use (and love!) the product, and you’re grateful to have them. Offer an incentive, like a free month or reduced fee for the first year, to motivate customers to make their own accounts 
3. If there’s still no conversion, follow up with a reminder of the benefit of having their own account 

Particularly persistent account sharers might need to be followed up multiple times, but cutting off their access is a last resort. Start instead with added friction like device verification, and ensure you’re not leaving them at a dead end where they have no course for correction — sometimes it looks like account sharing but is legitimate so build in an escape hatch. 

The best time to present this message is when they have the highest intent, which is often when they first try to log in to an account that’s been shared with them or when they’re returning to use the product. They’ve acknowledged that they see your value, so make having their own account the easiest way for them to access it. 

Account sharing is a complex problem to solve, and Netflix is definitely one of the companies to watch for early results in this area. One thing is for certain, it is still early and it will expand outside of content and to other industries such as business software and education. 

We expect that companies looking to cash in on the golden opportunity to turn one user into many will be increasingly turning to platforms that do the detection for them as a way to avoid needing to invest at the scale Netflix has. 

Cayden Meyer is the CEO and founder of Upollo.