Synamedia called password sharing between friends and family members "casual sharing", a common practice that Netflix CEO Reed Hastings once described as a positive thing since people who do this are likely to become paying subscribers of the service.
Chances are you share a Netflix account with someone.
The technology can also be used to detect and shut down large-scale, for-profit credentials sharing accounts run by fraudsters, according to Synamedia.
Snyamedia learned from research done by Magid that roughly 26 percent of millennials share their personal Netflix credentials, creating a potentially massive loss in revenue.
Netflix's CEO Reed Hastings has previously expressed no concern over the issue, noting that it's part of what makes streaming services so desirable.
The system would, then, rate the users between 1 and 10 where 1 indicates that the user is likely not sharing the password and 10 represents a user who has a high probability of sharing passwords with someone. Synamedia won't reveal which companies are trialing its new software, although it confirmed that it is now being trialed by a "number of firms", namely one that sells other services to some big industry names, like AT&T, Comcast, Disney, Verizon and Sky.
"Casual credentials sharing is becoming too expensive to ignore", said a Synamedia spokesman. "Our new solution gives operators the ability to take action", said Jean Marc Racine, Synamedia's chief product officer.
The system can work out if the service is being used in a "wrong" location - and knows when people are using it in their homes or holiday homes, for example. This includes warning the primary user about the unauthorized usage of their account and giving them an option to switch to a premium account.
'It's a great way to keep honest people honest while benefiting from an incremental revenue stream'.