Netflix wants users who share passwords with people outside their household to pay an additional fee to keep streaming.
Variety Reports that if Netflix rolls the program out globally it could add an incremental $1.6 billion in global revenue annually, or about 4% upside to the firm’s 2023 revenue projection of $38.8 billion. Analysts estimate assumes that about half of non-paying Netflix password-sharing households will become paying members; further, they predict that of those, about half will opt to sign up for their own separate paid account.
For now, Netflix is only testing the password sharing prompts for its members in Chile, Costa Rica and Peru. The company said it will “work on understanding the utility” of the new feature before making changes anywhere else in the world.
“I think Netflix are right to crack down on this! I also think the general public, have a very loose understanding of what they should get for free, and what they should pay for. Having grown up in the industry, it feels like I’ve been fighting against the expectation that everything should be free”, Philip Cowell says in a discussion on LinkedIn.
“The problem here is that Netflix isn’t a monopoly. There’s great original programming on Netflix but this is also true of other available streaming platforms, and I don’t think there are many non-Netflix originals that can only be found on Netflix. The only real way to prevent customer substitution in streaming is with unique content, not unique tech, and unique content is expensive and requires continual capital investment. I am pretty confident that if Netflix really tried to crack down on account sharing and the like, a lot of people would simply switch to other streaming platforms”, a LinkedIn Member observes.
