Netflix’s Password Sharing Crackdown Has It Sounding More And More Like Comcast
from the nickel-and-dime dept
After years of saying password sharing wasn’t really a big deal and was akin to free advertising, Netflix recently announced it would be cracking down on password sharing. It started with a new trial in Chile, Costa Rica, and Peru, where users were forced to pay an additional fee if they shared their password with users outside of their home.
Now Netflix has expanded the trial to Argentina, El Salvador, Guatemala, Honduras, and the Dominican Republic, where users who try to stream Netflix outside of their central address will be nagged and forced to pay an additional fee per home. In a statement, the company tried to pretend that password sharing was a big problem:
“It’s great that our members love Netflix movies and TV shows so much they want to share them more broadly,” Chengyi Long, Netflix’s director of product innovation, said in a statement. “But today’s widespread account sharing between households undermines our long term ability to invest in and improve our service.”
Of course that’s bullshit.
One, Netflix already limits the number of concurrent streams for each account, so there’s already restrictions in place for additional users that might be sharing your core password. Two, Netflix just got done imposing a major price hike that should have easily helped them “invest in and improve their service.” Three, the company spent years making it clear password sharing was no big deal.
What’s actually happening is that Netflix is a publicly traded company that is facing newfound competition and saturated growth. Yet it still has to please insatiable Wall Street investors and deliver their quarter over quarter returns. Just offering a good service at a good price isn’t good enough, so Netflix is now forced to nickel-and-dime users to extract more money for the same service.
Previous reports made it clear that these trials aren’t particularly well done and have been confusing the hell out of many subscribers, especially in developing nations. So Netflix’s grand idea to squeeze existing customers to please Wall Street is likely to backfire, driving existing subscribers to alternative streaming providers, or making them more likely to occasionally put their subscription on hold.
This is, of course, the cycle that traditional cable giants like Comcast have been caught in for years, consistently trying to excite Wall Street by cutting back on things like customer service as they try to extract blood from a stone. The difference is that Netflix faces actual competition in the streaming wars, giving alternative competitors a chance to differentiate simply by not being an asshole.