Netflix customers who share their passwords with friends and family must pay an extra £5 charge unless they stop.
On Tuesday night the US company confirmed it has begun emailing households that it suspects of sharing their details.
The email tells customers: “Your Netflix account is for you and the people you live with – your household.”
It says that if customers want to share their account with other households, they can – for an extra £4.99 per month.
A statement from the company said: “We recognise that our members have many entertainment choices.
“It’s why we continue to invest heavily in a wide variety of new films and TV programmes – so whatever your taste, mood or language and whoever you’re watching with, there’s always something satisfying to watch on Netflix.”
However, Netflix said customers who currently pay for their membership through bundles with suppliers such as BT and Sky will not be able to add extra users.
Netflix estimates that as many as 100m households around the world share their passwords.
The company initially tolerated the practice but has been cracking down on it in an effort to revive flagging growth.
Users will be asked to set a “primary location” where they generally watch. Netflix will then use wi-fi addresses to tell if an account is being accessed at more than one address.
Customers will face a monthly charge on top of their existing subscription for every additional household where the account is used.