Two years ago we reported that that investors were demanding that Netflix take action against free-loading Netflix users after disappointing Q3 earnings.

At the time Netflix’s management resisted, with Greg Peters, Netflix’s chief product officer, saying:

We continue to monitor it so we’re looking at the situation. We’ll see those consumer-friendly ways to push on the edges of that.

Today Netflix is flying high, with more than 200 million paying subscribers, but it seems the investors have won, as Netflix has announced new measures to attack password sharing.

Introduced under the guise of a security measure, if Netflix suspects you are using a shared password, it will challenge you to enter a security code sent to your phone or email into the app.

“This test is designed to help ensure that people using Netflix accounts are authorized to do so,” Netflix said.

Netflix is reportedly losing $9 billion per year to password sharing, but presumably also knows a significant number of their subscribers would not have purchased a subscription of they could not spread the value over a number of users, especially if their own usage is intermittent.

The measure is currently in testing and is being trialled wherever Netflix is being offered.

via The Verge

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