Netflix is considering pulling the breaks on widespread password sharing to boost revenues. The streaming giant is in damage control mode after losing subscribers for the first time in a decade. Netflix recently sent a letter to its shareholders explaining the likely reason for the unprecedented decline.
Netflix estimates that there are roughly 100 million “additional households” using the platform in addition to the 222 million households that actually pay for the service. Around 30 million of the additional households are from the U.S. and Canada. This comes in the wake of the platform bumping up its subscription prices.
“Account sharing as a percentage of our paying membership hasn’t changed much over the years, but, coupled with the first factor, means it’s harder to grow membership in many markets – an issue that was obscured by our COVID growth,” the letter read (via The Verge).
In a video discussing the quarterly earnings, Netflix co-CEO Reed Hastings said they are working on monetizing account sharing. “You know, we’ve been thinking about that for a couple years. But you know, when we were growing fast, it wasn’t the high priority to work on. And now we’re working super hard on it. Remember, these are over 100 million households that already are choosing to view Netflix. They love the service. We’ve just gotta get paid in some degree for them,” Hastings said.
Netflix is testing a “sub accounts” feature in Chile, Costa Rica, and Peru
“If you’ve got a sister that’s living in a different city, you want to share Netflix with her, that’s great,” Netflix’s chief operating officer and chief product officer Greg Peters said.
“We’re not trying to shut down that sharing. But we’re going to ask you to pay a bit more to be able to share with her so she gets the benefit and the value of the service but we also get the value of the revenue associated with that viewing.”
Regions like Chile, Costa Rica, and Peru are currently part of a test wherein subscribers can add “sub accounts” for two people at reduced costs. But since it’s still an experiment, we can’t tell if this will help solve Netflix’s problems. Regardless, the streaming platform would want to come up with a solution sooner rather than later.
2022-04-20 15:05:08