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Why is Netflix ending password sharing?

The streaming giant estimates 100 million households share passwords.

HOUSTON — It’s no secret that Netflix passwords are shared—a lot. There is bad news if you are still using the password from your former college roommate’s ex-boyfriend. The streaming service announced that starting next year, account holders who share their login information with people outside their household will have to make sub-accounts that, of course, will cost money. During a trial run earlier this year, it cost $3 a month for these sub-accounts. By the way, Netflix defines a household as anyone living together.

RELATED: Netflix signals it will soon crack down on password-sharing with new 'Profile Transfer' feature

That’s not the only change Netflix is making. The Washington Post reports the company will launch a cheaper ad-supported plan in November. That will cost $6.99 a month and viewers will see four to five minutes of ads each hour. On this cheaper tier, some of the streaming company’s content will not be available because of licensing restrictions.

RELATED: You'll soon be able to pay less for Netflix, if you're willing to watch commercials

This all comes as Netflix fights for dominance in a post-pandemic world. After getting a big bump in subscribers at the start of the pandemic, it has struggled to maintain its streaming superiority as competitors crowd in. The company estimates 100 million households use the service without paying for it. Now, Netflix wants those password pirates to pay up.

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