After more than a year of warnings, Netflix is cracking down on password sharing in three major markets, including the U.S. Netflix announced the latest action on its internal website.

The decision comes just as some HBO Max users expressed angry frustration online about the switch to the Max streaming service, marking a major moment for the best streaming service. Disney Plus and Hulu have stopped offering shows and movies, as has HBO Max, and price increases remain frequent.

And while families will resent having to pay more to share with relatives elsewhere (Netflix prices are already as high as $20), there doesn't seem to be any other option. At least, other than canceling the Netflix subscription.

So let me explain all the details of this very confusing situation so that you know what is going on when Netflix warns you about a rule violation.

In 2022, Netflix basically announced that they would start stopping users from sharing their accounts in ways that they believe are against the rules. Currently, Netflix has stated that one Netflix account is for use within one household.

Currently, Netflix defines a household as "a collection of devices connected to the Internet at the primary location where Netflix is viewed. All other devices using a Netflix account with the same Internet connection as this TV automatically become part of the Netflix household.

The company began testing this in Peru, Chile, and Costa Rica last year and expanded to other regions, including Canada, earlier this year.

Netflix announced on Tuesday, May 23, that it will issue a warning to users in the United States, United Kingdom, and Australia about breaking the one-household rule. The announcement, titled "Sharing Update," stated that it would begin sending out warning emails the same day.

What is odd about this email is that Netflix states that it will "send this email to members who are sharing Netflix outside of their household," but the email does not say if the rule is actually broken. It is apparently a preamble to the following warning.

Netflix does not clearly explain how it does this in the email, but there are already examples. Canadian-based Twitter user @TheCatzilla shared the image below of a TV that basically tells Seinfeld's The Soup Nazi in a long sentence saying "No soup for you."

Of course, you can object to the notice and try to change your primary location, but it will be a headache for those who use Netflix elsewhere. Many will try to see how much they can squeeze out of Netflix, but I doubt this will work.

Tech-savvy Netflix users, or those who listen to ad breaks on podcasts, have probably heard that they can use one of the best VPNs to watch content not available on their country's version of Netflix. This is because the distributor sells the rights to different TV shows and movies to different services in different countries.

And while it has worked in the past, VPNs can't make your Roku device or Fire TV stick appear to be in a particular household. So you can't outsmart Netflix.

Nevertheless, a loophole in Netflix's password-sharing crackdown has been found, and it's a technical one: use the NordVPN Meshnet tool to make it look like your computer is on a different network.

They probably won't, but instead of making you buy a new account, Netflix has a cheaper alternative. It's called "Paid Sharing," but Netflix did not use that term in its recent attack.

Currently, Netflix frames this as the ability to purchase "additional members" of your household. The price for that "member" is $8/£4.99/$7.99 AUD.

For obvious reasons, "Netflix wants more money. But why is this happening now? Now, let's look back at when we first learned of Netflix's crackdown on password sharing: on April 19, 2022.

Netflix released its quarterly report, which showed an overall decline in subscribers for the first time in over a decade, and also revealed that it would target password sharers. In other words, this can be seen as one way for Netflix to increase subscriber numbers when it cannot find new users.

In an effort not to appear disingenuous, Netflix pretends that the story is about the content it produces, saying that password sharing "is affecting our ability to invest in great new TV and movies."

At least Netflix is not blaming account sharing as the reason for canceling existing shows.

Netflix is probably familiar with the "cancel Netflix" trend on social media, and probably aware of reports that one million Netflix users in Spain cancelled their accounts during the password crackdown You're probably right.

Bad news for those expecting a backlash. Netflix's letter to shareholders for the first quarter of 2023 explains that it expects a positive swing after a negative performance. As in Latin America, there is a cancellation reaction in each market when the news is announced, which will affect short-term membership growth. However, as borrowers begin to activate their accounts and existing members add "additional member" accounts, we expect membership acquisition and revenue to increase," he writes.