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Netflix cracks down on password sharing

Yahoo Finance Senior Reporter Alexandra Canal breaks down Netflix's password sharing crackdown in the U.S. and what this means for Netflix users.

Video transcript

RACHELLE AKUFFO: And, of course, a day that a lot of people in the US were dreading. Netflix announcing that it's finally rolling out its password crackdown plan in the US. Tell us more about that.

ALLIE CANAL: And there was a lot of complaining among Netflix users now. It's important to define what Netflix says is a household. It's all those people that live within the household. So if you have a roommate, that's fine. You guys can share an account. But if you have a child that has moved out. That's a no, no. That child then has to go and create their own account.

Now, Netflix says, if you want to add one extra user, you can for an additional $8 a month. But that's getting pretty close to the pricing of that premium tier. So they're really encouraging these subscribers to sign up for accounts on their own. They also launched different types of initiatives, such as easier ways to manage your device.

So with one click, you can sign out of all of your accounts. So if you're on the go, if you're at a hotel and you sign in there, you can easily sign out. Also, you can transfer a profile so that users that currently have a Netflix account attached to a primary household, they don't lose that data.

So like I said, users aren't necessarily happy about this. But analysts are. They really do think that this is going to drive more subscribers and add to those profitability efforts. So it's something to watch. But shares today, they're up about 2%. So far, so good for Wall Street.

RACHELLE AKUFFO: It seemed to work out when they rolled it out in Canada. So we'll see what happens with the US as well. Allie Canal, thank you so much for that update.