Netflix warns users against password sharing outside households

Netflix on Tuesday said it would be sending an email to U.S. subscribers who share passwords with people outside their households. The notice will come with a warning: "Your Netflix account is for you and the people you live with."

Netflix had previously said that a crackdown on password-sharing would be coming by the end of June.

"Everyone living in that household can use Netflix wherever they are — at home, on the go, on holiday," the streaming service said.

Users who want to share Netflix with someone who lives outside their household can either "buy an extra member" for an added price of $7.99 per month, or they can transfer existing profiles to new memberships.

The announcement in January that Netflix would no longer allow users to share their passwords broadly roiled its fan base. The strategy revealed a 180-degree shift for the streaming company, which once encouraged password sharing as a way to attract more viewers.

"Love is sharing a password," the company tweeted six years ago.

Now, as it faces competition for streaming viewers from the likes of Disney+, Hulu, Peacock and Paramount+, Netflix is looking to make more money from its existing subscriber base.

Netflix will likely use a person's geographic location, as determined by the IP address of any internet-connected device, to determine which people count as "household" members who live together, Insider reporter Sarah Saril told CBS News earlier this year.

"If you're watching on a TV, it'll provide exactly where you are," Saril said. "They only want people in your household, at your address, watching."

Netflix says on its website that the company uses "IP addresses, device IDs, and account activity from devices signed into the Netflix account" to determine which devices are in the same household.

— Irina Ivanova contributed to this report. 

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