Netflix bosses are reportedly ready to have a big crackdown on family and friends password sharing for the streaming service. 

Netflix has told shareholders that over 100 million households engaged in account sharing, and it "undermines our long-term ability to invest in and improve Netflix, as well as build our business".

The company has plans for a new paid-sharing system to launch "more broadly" in the first quarter of 2023.

At the moment, three countries - Costa Rica, Chile and Peru - are testing the new system, where anyone outside a household (those living in the same property) cannot use the same account.

The company is using IP addresses, device IDs and account activity to monitor who is using the same accounts.

Those who aren’t part of what Netflix considers a household will have to get their own account.

But many people involved in the pilot have been left confused about whether they can use their account away from home and what is meant by a household.

Netflix defines a household as ‘exclusively people a subscriber lives with’ - and not their immediate family.

People are also being offered the chance to add an outsider to their account for an additional fee, which costs less than a monthly subscription.