The Netflix policy here is a good compromise: limit the number of concurrent streams for each account and then turn a blind eye to password sharing. That way sharing passwords is allowed in practice, but also has a clear consequence - you may be blocked from playback if too many of your family members (or friends) are watching simultaneously.
Implmenting stream limits is tricky, as there are edge cases that are hard to get right. However, common DRM services like Widevine and Playready have adopted the extensions necessary to implement stream limits, so there are already "of-the-shelf" solutions.
In short, this is a non-issue with available technical solutions.
Full disclosure: I'm an engineer at Netflix who works on cable set-top boxes.
Implmenting stream limits is tricky, as there are edge cases that are hard to get right. However, common DRM services like Widevine and Playready have adopted the extensions necessary to implement stream limits, so there are already "of-the-shelf" solutions.
In short, this is a non-issue with available technical solutions.
Full disclosure: I'm an engineer at Netflix who works on cable set-top boxes.