And the streaming giant has a plan to make freeloaders pay up.
Netflix (NFLX) – Get Netflix, Inc. Report knows full well that you still use your ex’s Netflix password. And it has a plan to nag you to stop being such a mooch.
Ok, so you might personally be an honest citizen with your own Netflix account and all, but there are a lot of people out there who still use log-in information from their parents, best friends and former roommates.
Up to 14% of Netflix users admit that they use a Netflix account from someone they no longer live with, according to a 2019 survey from analysts MoffettNathanson, Vox reports.
At the time, Netflix had reported that it had 139 million subscribers around the world, so that meant 8 million people weren’t paying.
But Netflix went through a huge subscriber boom during the pandemic, and even though that’s leveled off a bit, it still has an eye-ball popping 222 million subscribers.
So if the 14% statistic still stands, that is around 31 million people not paying.
Netflix did not respond to a request for comment.
The Crackdown on Password-Sharing is Coming
While Netflix’s terms of service said a customer’s account “may not be shared with individuals beyond your household,” no one really took that warning seriously, including Netflix.
As the Vox article notes, the streaming giant “has not gone out of its way — at all — to stop password sharers.”
Netflix executives aren’t going to openly endorse password sharing, but there’s a few likely reasons they had a laissez faire attitude about the whole thing for a while.
College kids using mom’s account will one day, hopefully, grow up and have adult jobs and might start paying for their own account, so why not just let them get accustomed to the product now.
There’s also the idea that aggressively kicking freeloaders off the platform would make the company look miserly and uncool, thus sparking a public relations headache.
Finally, it’s also very likely that Netflix, which is focused on retaining customers and remaining one of the biggest media companies on earth, simply had other things to worry about.
At least until recently.
How Is Netflix Getting You To Sign Up?
Netflix isn’t making a full-stop, aggressive push to get people to stop sharing accounts.
Instead, much like a parent that wants their twenty-something child to grow up and get their own insurance plan, it’s started rolling out a program that will, essentially, start nagging people into getting their own account or signing up for different plan.
Netflix is testing a feature in Chile, Costa Rica and Peru that will let users who share accounts with people outside their household continue to do so, while paying a little bit more.
Users will be able to add up to two people, for 2380 CLP in Chile, $2.99 USD in Costa Rica and 7.9 PEN in Peru, according to Variety.
In the next few weeks, Netflix will notify members that share their account about the options.
If a device outside the household logs into Netflix, they may be asked to verify the log-in by entering a verification code sent to whoever is paying for the service.
The company is also developing a feature that will let you transfer your profile to a new account. So if you break up with someone, you can take your no doubt carefully curated list of films to watch with you when you get your own service.
Netflix/TheStreet
Why Is Netflix Trying To Get People To Stop Mooching?
The new push to get people to stop sharing, or at least pay for extra accounts, is still in the early phases, and there’s no word on whether it will get introduced to other countries.
But why has Netflix, formerly the king of chill, coming after the freeloaders?
“We’ve always made it easy for people who live together to share their Netflix account, with features like separate profiles and multiple streams in our Standard and Premium plans,” Chengyi Long, director of product innovation at Netflix, wrote in a blog post.
“While these have been hugely popular, they have also created some confusion about when and how Netflix can be shared. As a result, accounts are being shared between households — impacting our ability to invest in great new TV and films for our members.”
That last part is key right there. Netflix is doing fine. More than fine, actually as it’s the number one streaming service.
But the company has had a rough time in the stock market lately, as the pandemic boom it experienced two years ago is starting to wear off. It experienced a 22% plunge last week and dropped an additional 2.6% on Monday to close at $387.15.
That’s not a drop that is going to put the company out of business, but it might make executives feel a little less generous and a little more inclined to figure out how it can maximize the value of its product.
There’s also the persistent idea floating around that everyone who is inclined to sign-up for Netflix has already done so by now, and the company has hit a natural ceiling.
That may or may not be true, but if the company does want to keep growing, it’s going to need to keep investing in new shows and movies to get people to sign-up — or to not leave after they’ve watched the heavily hyped show they joined to check out.
It costs a lot to stay on top, and at this point in its growth, Netflix needs every dollar as the streaming wars continue to escalate and Disney (DIS) – Get Walt Disney Company Report and HBO Max (T) – Get AT&T Inc. Report keep coming for the throne.
