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I honestly haven't read the Netflix ToS so I'm not certain if that counts as fraud or not. But, I suspect that there is some sort of provision that allows for persons in the same household to use it when they are temporarily away from the home. I would think that would include college students away at college since they are usually not considered residents of other states when they go out of state, at least not for in state tuition purposes, so I think arguably that is temporarily away from the home site of the subscription and is not fraud.
However, if the kid is 25 and moved to say Chicago for their first job out of college, then yes, it is fraud. They are clearly no longer members of the household to which the account is linked. But, again, this really depends on what the ToS actually says and I'm frankly not going to go read it to find out because you are just looking for situations where people would feel morally outraged and clutch their pearls if Netflix actually did something about it. But, we both know that is not the issue and Netflix isn't really going to do anything about it anyway.
The issue is with people giving their usernames and passwords to friends, people they are dating, family members that don't live with them, co-workers, etc. And in those situations, yes, I think it's fraud and I think we all know it is wrong despite all the things we do to try to explain why it's okay to do it. We think it's okay to do because Netflix makes a bunch of money, there is no real victim, corporations or evil, their content isn't worth what I pay for it anyway, I bought it so I can do what I want with it, I'm not actually taking anything, etc., etc.
And that's why Netflix is trying out letting people pay a small fee (apparently around $3 per month) to share usernames and passwords with whoever they want. They won't really enforce it, but it's likely that enough people will have have a bit of guilt about it that they will decide to pay it in situations where they know its fraud. They aren't going to pay it for their kid away at college (or really their kid at all) but they may voluntarily pay it when they give their username and password to their lazy, deadbeat sister who has no job because she wanted a career in modern dance.
In the end, I really don't care if people want to steal Netflix's service by "sharing" their username and passwords, but please stop lying to yourselves about it and pretending it's not really stealing or that it's not really morally wrong.
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