One account per household has historically not been enforced by Netflix.Netflix Password Sharing resulting in declining revenue and customer numbers. Netflix is hoping that a crackdown on password sharing would stop these trends. Netflix will be able to profit from all the consumers they have been losing out on if they start charging subscribers a price to share their subscriptions with people who live in other homes.
It might not be as simple as that.
Netflix announced last year that password sharing had contributed to its first loss in subscribers in over a decade, and has now rolled out new paid sharing rules in the US that want users to pay an extra $7.99 per month to let just one person outside their household access their subscription.
Many questions remain about how Netflix will actually implement this paid sharing policy, and whether it will actually help increase the company’s bottom line. Netflix has warned its investors of a “cancel reaction” several times in the past when talking about paid sharing, meaning that some people will cancel their subscriptions in response to the rollout in their locations. It has already seen that kind of reaction in Spain, where data from the analytics group Kantar found that the streamer lost 1 million users following the crackdown.
“While Netflix assures investors that its results in Canada are a “reliable indicator” of what will happen here, Dan Rayburn, a streaming media expert and industry analyst, tells The Verge ‘that’s not a fair comparison,’ as the number of subscribers and households in both countries are just ‘so different.'”
The company also fails to take into account how many subscribers may lower their plans rather than cancel them altogether, something Rayburn says is a major concern as well. As some users might only subscribe to Netflix’s more expensive plans for the perk of watching Netflix simultaneously from different devices — and across different households — without password sharing, they lose some of their value.
While Netflix’s $15.49 per month Standard plan lets you watch Netflix on two devices at a time, the $19.99 per month Premium plan allows up to four simultaneous viewers, the shift toward password sharing could mean that some users will opt for the $9.99 per month Basic plan instead of canceling their subscription, which allows users to watch Netflix on just one device at a time. This potential trend could deal a blow to Netflix’s average revenue per user (ARPU), which sat at $16.18 in its last earnings report. “The cancellations will hurt, but the downgrades will hurt as well because Netflix can’t make that up in advertising,” Rayburn explains.
Streamers face the same dilemma when it comes to password sharing.
If paid sharing hurts Netflix’s balance sheet, it could have a huge impact on the entire streaming industry, regardless of whether it hurts Netflix. Several other companies are likely to be interested in how consumers respond to Netflix’s crackdown on password sharing, including Disney, Warner Bros. Discovery, and Paramount. Similar to the way several streamers hopped on the price hike bandwagon last year, other services may want to follow suit if all goes well.
“All streamers face the same quandary of how to deal with password sharing,” says Paul Erickson, the principal at Erickson Strategy and Insights. “Everybody is going to take a look at this or take their cues from how Netflix handles this, how the American consumer reacts, or how they react and push ahead themselves.” With a streamer as big as Netflix getting into paid sharing, there’s always a chance that paid sharing will become an industry norm. Erickson notes that he sees paid sharing as “part of the maturation” of the streaming industry, noting that “it had to be sorted out at some point, and it’s taking place now.”
Aside from Netflix’s investors, I don’t think anyone is happy about this change — especially since Netflix is THE only service that’s making users pay extra. It’s still far too early to tell how many subscribers the streamer will lose over the change, how many will pick a cheaper plan, or how many will actually purchase add-on accounts. But Netflix has to be careful how it implements the change. After all, it doesn’t want to alienate all the paying customers who helped put the service in front of more eyeballs by sharing their passwords.
Netflix’s ban on password sharing affects who?
Members of Netflix who share an account with out-of-household viewers should expect to receive an email informing them that Netflix is regulating its password sharing feature.
The password-sharing regulation will not affect members who share their account with family members, whether they’re at home or traveling. Those viewers will have access to features like “Transfer Profile” and “Manage Access and Devices” to continue sharing their accounts.
Netflix users who share their accounts with out-of-household viewers will see significant changes.
What is the end date of Netflix password sharing?(when is netflix password sharing ending)
In the United States, Netflix officially implemented its new password-sharing protocol on Tuesday, May 23rd, despite reports saying it would end in early 2022. In spite of the new password-sharing regulation, it’s not a complete ban, since sharing an account now comes with a fee.
What is the cost of Netflix password sharing?
Netflix password sharing will not be banned forever, but it will no longer be free to do so. In addition to the $9.99 per month basic, non-ad supported Netflix account, Netflix now charges $7.99 per month if users plan to share access with out-of-household viewers.
The service added in the blog post that its members have a wide variety of entertainment choices. “That’s why we continue to invest heavily in a wide range of new movies and TV shows — so whatever your taste, mood, language, or who you’re watching with, Netflix will always have something you’ll enjoy.”
In a shared Netflix account, how can out-of-household users be removed?(how is netflix ending password sharing)
On Netflix’s website, profile owners can change their passwords or sign out of all devices to avoid paying the shared-password fee.
Netflix notified account holders that they can “buy an extra member” for $7.99 per month or more if they want to add extra members to their account.
If owners are not ready (or willing) to pay the extra cost for an out-of-home viewer, the changes include the option to kick people off of the active account by following directions under the “transfer account” section. By doing so, the account “borrower” will be prompted to register for their own account.
With Netflix’s standard monthly package costing $15.49, adding one more user results in an increase of nearly 50 percent.
Netflix has banned password sharing in which countries?
Netflix announced on May 23 that it was sending emails about account sharing to customers in 103 countries and territories, including the United States, Britain, France, Germany, Australia, Singapore, Mexico, and Brazil for Netflix Password Sharing .
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