Netflix Exec: Anti-Password Sharing Measures Coming This Quarter; Trying to Meet Users Where They Are
Netflix watchers who use another’s login credentials should enjoy it while they can, because it’s about to get a lot more difficult to do. Netflix held its fourth-quarter earnings call on Thursday and executives used the occasion to share more details about their plans to cut down on users sharing passwords, which will roll out in the next few months.
Newly named co-CEO Greg Peters spoke about the different ways that Netflix would implement measures to keep people from sharing their accounts and encourage those who are sharing to sign up for an account of their own instead.
“We’ve got folks that are watching Netflix who aren’t paying us as part of basically borrowing somebody else’s credentials,” Peters said. “And our goal is over this year to basically work through that situation and convert many of those folks to be paid accounts or to have the account owner pay for them to get enough subscription. But either way, we’re seeking to sort of monetize the viewing value that we’re delivering.
“[Some password sharers] could pay, but they don’t need to, and so they’re borrowing somebody’s account,” he continued. “And so our job is to give them a little bit of a nudge and to create features that make transitioning to their own account easy and simple.”
Peters then pointed to the new feature introduced in October 2022 that allows users currently using someone else’s credentials to migrate their personal user profile to a new account. That will give password-sharers who decide to sign up for their own account access to their viewing history, and their personalized viewing recommendations as well.
The company is also seeking a middle ground between forcing users now watching on someone else’s account to sign up for a whole new account of their own and simply kicking them off of Netflix altogether. Peters made clear that the company knows that some users truly are sharing because they can’t afford their own account and that Netflix will try to meet them halfway.
“I think there’s a range of motivations for different borrowers,” he said. “So some of it is economically driven and so a part of what we’re trying to do is that we are being responsive to that and finding the right price points, whether in terms of an individual account or an extra member affordance.”
That likely means that the service will move forward with methods it tested in Central and South America in 2022. Those methods entailed charging the primary account owner an extra $2.99 to set up a sub-account for every user outside of the home. The company also hopes that by putting the paying user on the hook for the non-paying user, it will convince members to stop giving out their passwords in the first place.
It sounds as if that’s the primary method Netflix has settled on to curb password-sharing for now. Peters said the company has been doing “thoughtful experimentation to let our members speak to us in terms of what
set of solutions work for them.”
Some of that experimentation has included more out-of-the-box solutions, including the idea of introducing pay-per-view rentals as a way to cut down on multiple viewers on one paid account.
Overall, Netflix estimates as many as 100 million people worldwide are using someone else’s account. Despite a global paid subscriber base now over 230 million subscribers, the company is clearly focused on monetizing these sharers however it can, but it knows that it will lose some viewers in the process.
“I think it’s worth noting that this will not be a universally popular move, so there will current members that are unhappy with this move,” Peters said. “We’ll see a bit of a cancel reaction to that. We think of this as similar to what we see when we raise prices. So we get some increased churn associated with that for a period of time. But then generally, what happens is both from the specific changes that we make, we’ll see folks come on as new subscribers, essentially borrowers creating their accounts or incremental monetization through the extra member that will happen shortly thereafter.”
Netflix
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