Netflix to crack down on subscription sharing in three countries
One industry that has seen a boom during the pandemic is streaming. A new report from the Motion Picture Association reveals that subscriptions to online video platforms in the United States increased by 14% last year compared to 2020.
But there’s also more competition in the streaming world than two years ago. Services need to get creative to increase revenue and subscriber numbers.
For streaming giant Netflix, that could mean cracking down on freeloaders. Starting in Chile, Costa Rica, and Peru, the company will test a new system that charges around $3 a month to user accounts outside of their household.
Eleanor Patterson has so many streaming subscriptions — seven, off the top of her head. “I give my password to a few people. My mother, I gave my mother my password.
Patterson studies television and media trends as an assistant professor at Auburn University in Alabama. In its early days, she said, Netflix basically endorsed sharing passwords.
“Just to be able to show the expansion, even if some people smuggle it or get it unofficially.”
Now it has shifted gears, she said, from growing its cultural footprint to growing its revenue. But it’s not as simple as arresting these traffickers.
“It’s like putting toothpaste back in a tube,” Patterson said.
Consumers are sensitive to having things taken away from them, according to David Offenberg, professor of entertainment finance at Loyola Marymount University in Los Angeles.
That’s why he said that Netflix, for now, is just testing the royalty system for additional users. “I think they’re trying to avoid alienating customers, I think they’re trying to avoid bad press, I think they’re trying to avoid having a target on their back.”
Netflix is swimming in a sea of competitors, and anything that goes against user-friendly ethics could backfire. The whole industry will be watching this particular Netflix pilot, said Mukul Krishna, digital ecosystem analyst at Frost & Sullivan.
“If that fails spectacularly” – as if customers were canceling their subscriptions en masse – “then competitors would want to project, ‘Hey, we’ll let you do this.’”
So if you used your ex-boyfriend’s mom’s HBO account to watch “Succession,” your time isn’t quite up yet.