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Netflix Vows Not to ‘Turn the Screws’ on Password Sharing

Aubrey Meister

Netflix has been taking a safe approach when it comes to cracking down on shared subscriptions. Now, after their first-quarter reports have come out, they may be more inclined to enforce their rules, but they still want to proceed with caution.

Netflix reported its first-quarter numbers yesterday, and it was their worst since 2013. One contributing factor to the company’s loss is shared accounts. Citibank analyst Jason Bazinet estimated that Netflix loses $6 billion each year as a result of so many subscribers sharing their accounts.

Though Netflix sees the importance in limiting shared accounts, the company is keeping consumers in mind. Netflix Co-CEO Reed Hastings said during the Q1 interview, “We test many things but we would never roll something out that feels like turning the screws [on consumers]. It’s got to feel like it makes sense to consumers, that they understand it.”

By implementing tests to cut back on shared subscriptions, the company has been attempting to “harmonize with the way consumers think about it.”

Since March 2021, Netflix has been attempting to put an end to subscribers sharing their accounts with those who aren’t in the same household. The company started cracking down by sending out a prompt that reads, “If you don’t live with the owner of this account, you need your own account to keep watching.” Then, the user is encouraged to verify the account with text or email, but this is easy to work around. A study showed that 27% of streaming services are used in multiple homes. Not only are consumers sharing their subscriptions with friends and family, but they are also selling them to reduce costs.

Greg Peters, COO and chief product officer at Netflix, doesn’t believe that people have harmful intentions when deciding to share their accounts. He explains, “How people orient themselves to the service is different country to country. It’s more than just how they think about maybe how they think they’re working the system. It’s how they think about sharing the service with a family member or someone they love.”

Netflix knows just how critical it is to reduce shared and sold subscriptions. It will be interesting to see how the company plans to combat the issue and reap the benefits while trying to retain subscribers.

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