A Netflix announcement may change how you watch it forever

Will the tactic help turn freeloaders into paid subscribers?
Grant Currin
The Netflix logo.Netflix

You've done it. I've done it. Even your best friend's mom has (probably) done it.

We've all used somebody else's login info to keep from paying for a streaming service. Or two. Or three.

And who could blame her? The platforms make it so easy.

At least they did. 

Netflix announced today that it's trying out two new features that strongly suggest times are changing. 

Chengyi Long, the company's director of product information, writes in a blog post that new features — including separate profiles and simultaneous streaming from the same account — have "created some confusion about when and how Netflix can be shared." 

The company is shocked — shocked! — to find that "accounts are being shared between households." 

But don't worry: There's a fix on the way. The company has developed new methods for users in different households to share accounts "easily and securely, while also paying a bit more."

For a few dollars per month, users will be able to add a new "member" to an account. New members get their profile and login information, the company says.

Users will also be able to transfer their profile to a new account, bringing their viewing history and personalized recommendations with them.

It's annoying news to freeloaders like me, you, and your best friend's mom, but it's not a huge surprise. As anyone who's registered an account has undoubtedly read, Section 4.2 of the platform's terms of service state that content and accounts "may not be shared with individuals beyond your household":

Netflix

The company hasn't tried very hard to enforce the provision for a long time. One big reason is that streaming services have been putting a lot of energy into getting as many committed viewers as possible. In prioritizing viewers instead of paying subscribers, the companies have forgone a lot of revenue in pursuit of building a massive global audience.

But it wasn't charity. The company hoped that getting hundreds of users hooked on House of Cards back in 2013 would eventually lead to more paying subscribers.

HBO CEO Richard Plepler put the playbook on the table back in 2014 when he told BuzzFeed that password sharing wasn't a problem because it "presents the brand to more and more people gives them an opportunity hopefully to become addicted to it."

Plepler went on to say that his company is "in the business of doing is building addicts, of building video addicts. The way we do that is by exposing our product, our brand, our shows, to more and more people" by letting them use their friends' passwords. During the 2015 Emmy Awards, comedian Andy Samberg even gave out his HBO Now password on live TV.

It's a strategy that worked for Netflix, HBO, and others in the late 2010s. The company has a head-spinning number of subscribers (more than 220 million), and it brings in roughly as much revenue as Starbucks ($30 billion last year).

But in the years since, there have been more and more streaming services launching, all competing for the eyeballs of you, me, and your best friend's mom. Disney+ claims nearly 130 million paying subscribers, and it only launched in November 2019. HBO Max, launched in May 2020, claims almost 74 million. Youtube Premium, launched in October 2015, claims 50 million. Paramount Plus, which just rebranded last year, has nearly 33 million. ESPN+, launched in 2018, has 21 million subscribers. Apple TV+, launched in November 2019, has 20 million subscribers. On the horizon is the launch of CNN+ — expected to go live this spring — to also compete for dollars and eyeballs.

This new competition means it's ostensibly more onerous for Netflix to keep growing. The reality set in back in January 2022, when the company missed its growth targets. Netflix stock dipped after it announced to shareholders that instead of its projected 222.06 million paid subscriptions, it had 221.84 million. That may not seem like a lot, but the approximate flatlining signaled that Netflix might take a step like the one announced on Wednesday.

These new changes are designed to push those numbers even higher.

The new features will launch in a few Latin American markets — Chile, Costa Rica, and Peru — in a few weeks. In Costa Rica, where subscriptions range from $8.99 to $15.99, it will cost $2.99 for each additional member added to an account.

So tell your best friend's mom to enjoy sharing an account while she still can — before Netflix comes for us all.

IELogoIELogo

Subscribe today

For full access to all features
and product updates.

%30 Save Quarterly

$25

$17.97

Quarterly

Subscribe Now
You can cancel anytime.
View Other Options

Already have an account? Log in

0 Comment
Already have an account? Log in