By Phillip Swann
The TV Answer Man – @tvanswerman
TV Answer Man, this burns my britches. Netflix is taking away our password sharing!! I let my cousin in Idaho use our account. What’s the big f—- deal with that? We pay good money for Netflix and my cousin is broke! Why are they doing this to us?!!! Everybody is just greedy, greedy, greedy!! — Helene, Salt Lake City.
Helene, Netflix once was a supporter of password sharing as top executives and company social media accounts frequently suggested it was acceptable and helpful to driving subscriptions. The company’s position was that password sharing led to more people giving Netflix a try, which in turn led to them ultimately subscribing.
But that has become quaint thinking at Netflix headquarters. The streamer yesterday revealed that it’s sending e-mail warnings to subscribers in the U.S. who are sharing passwords with non-household members. They will need to pay $7.99 a month to allow a non-household member to use their account effective immediately. (See this article on how Netflix will know a non-household member is using the account.
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Netflix has been doing this for several months in other countries, and it acknowledges it has trigged a significant number of cancellations. But it also says it has increased revenue, and that it believes many of the people who have cancelled will re-subscribe.
Still, this may seem unfair to consumers who have grown weary of subscribing to multiple streaming services to catch their favorite shows and live sports. But Netflix had little choice but to implement the crackdown.
Why?
Netflix, which once dominated the domestic and global streaming markets, is now facing stiff competition from multiple (and well-financed) companies such as Warner Bros. Discovery’s HBO Max, Disney Plus, Amazon’s Prime Video, Paramount Plus, Hulu and Comcast/NBC’s Peacock. The streaming war is intense with companies fighting over every customer and every penny. As a result, Netflix has actually lost subscribers in the U.S. and Canada over the last 12 months. (74.58 million after the 2022 first quarter down to 74.40 million after the 2023 first quarter) although it continues to do well worldwide.
The streamer needs to find new ways to generate revenue, which explains paid sharing, the new ads-included $6.99 a month plan, and the elimination of free trials. Ideas that were once considered unacceptable at Netflix headquarters are now welcomed with open arms. Netflix has even done two livestreams, something it once said it would likely never do.
As the streaming war continues to escalate, look for Netflix (and its competitors) to introduce even more new ideas, some of which may not be seen as consumer-friendly.
Helene, hope that makes sense. Happy viewing and stay safe!
Have a question about new TV technologies? Send it to The TV Answer Man at swann@tvanswerman.com Please include your first name and hometown in your message.
— Phillip Swann
@tvanswerman
IT seems to me that netflix should just turn off access to the channel if someone isnt paying for it Rather than charging an extra $7.99 to the customer that is paying for netflix!
This is how you quickly get changed to a “binge status service”, especially when I’m paying $15.49. I know how to cancel services and add a monthly prompt to my calendar. An additional $7.99 is just too much.
While it’s understandably frustrating for consumers who’ve grown accustomed to sharing their Netflix passwords with friends and family, this move by Netflix isn’t surprising given the increasingly competitive streaming landscape. As the market gets more saturated, every user, and thus every potential revenue source, counts. Streaming platforms, just like any other businesses, have to adapt and find ways to optimize their revenue streams.