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.

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Comments on “Netflix’s Password Sharing Crackdown Has It Sounding More And More Like Comcast”

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Anonymous Coward says:

But, but streaming is da future
but streaming is not as expensive as cable
but I’m a Cord Cutter

AGAIN, cord cutting is a fallacy because you’re still paying the SAME ISP that you were paying before you “cut the cord”! With “cord cutting” you pay at least twice: once (to the same ISP) for internet access; once to the streaming service for TV shows/movies.
The traditional ISP/cable TV set up, with its ever-increasing pricing, is not perfect either. We, Americans at least, value entertainment too much.

Tell the ISPs and streaming services that their prices are ridiculous and then drop their services for the nearest competitor, set up municipal ISP, something?!?

This comment has been deemed insightful by the community.
Jono793 says:

As someone pointed out in a previous story: this will disproportionately impact non-traditional housing arrangements.

In my case, I live in one town for work during the week. I see my partner and kids at the weekend. They use the service too. I also occasionally stay with my parents at their place and use my account from there. That’s three locations, but still one household; one user.

If Netflix try to impose this they won’t be getting a fee from me. They’ll be getting -£11, because I will be cancelling the service.

I’m currently dealing with diesel prices having doubled. Home gas and electricity supplies going up by £700 per year. And substantial increases in the cost of groceries.

Is Netflix think I’m going to pay more to use the same service with no added value. A service which I’m already having to seriously consider stopping because of this cost of living crisis, they’re delusional!

This comment has been deemed insightful by the community.
TaboToka (profile) says:


Because in unrestrained Capitalism, growth is the only metric that matters.

Look at Pepsi (NASDAQ:PEP) and Coke (NYSE:KO) – they’re both flat as hell, compared to growth stocks like TSLA (before Gimpy had a brain aneurysm and decided to “buy” Twitter). One of the primary reasons for this is the growth of their main product is zero. They each have locked up their markets with exclusive deals; that’s why sportsball stadiums, movie theaters, gas stations, etc have one or the other but not both.

Their only recourse is to buy/invent new fizzy drinks for us to buy, saturate the market, then jump on the next trend. Even though they are both VERY PROFITABLE, Wall Street doesn’t care.

Anonymous Coward says:

Re: Growth

Netflix is a growth company. They need to grow or die. In reality, they are becoming a cyclical company, which is more or less what you are describing.

The problems are that the stock price multipliers are different for cyclicals and growth companies and the Netflix management doesn’t know how to make the transition.

So they are going to try to pretend they are a growth company until they die.

nerdrage (profile) says:

Re: here's the reason...

Netflix’s owners are shareholders, who expect the share price to keep going up. That share price was artificially inflated due to the perception that Netflix would have a billion paying customers someday.

Now it looks like they are stalling out well short of that mark and investors realized their assumptions were wrong, so the share price fell 70%. Maybe now it’s at a more realistic level but Netflix has also been using that inflated share price as a piggy bank to keep funding their absurd amounts of content.

They can’t slow down the absurd spending levels because they literally don’t know what they’re doing. They don’t know where their next hit is coming from, so they throw shit against the wall to see what sticks.

Their competitors don’t face this problem. Disney slaps Marvel or Star Wars on a show and it’s a hit regardless of quality. HBO Max has DC, Dune and Game of Thrones, Amazon has Lord of the Rings and James Bond, and Apple doesn’t seem to care how much money they waste on streaming because it’s a rounding error on its balance sheets.

So the situation could be, Netflix simply can’t keep up with this merry chase. The alternative is that they get bought by Amazon or (if the rumors are true) Microsoft. Then Hastings & co get fired and a new team replaces them.

So ultimately, corporations chase higher share prices because the current management team wants to keep their jobs. In many cases, corporations would be better off being bought or at any rate no worse off. Even if Microsoft bought them, there would still be something called “Netflix” and we could still subscribe to it.

TaboToka (profile) says:

Dumber than a box of rocks

I have Netflix on my Roku, tablet and phone, so I can watch wherever. If Netflix wants to nag me because I am using my device, then I will shortly become an ex-customer.

Wall Street is really the devil’s crackpipe. If they want to keep smoking it, they’re going to have to erode their show quality even more, replace employees with more-expensive contractors, nickel & dime everyone and raise prices for no reason.

Naughty Autie says:


If they want to keep smoking it, they’re going to have to erode their show quality even more, replace employees with more-expensive contractors, nickel & dime everyone and raise prices for no reason.

They’ve done that already. Customers will soon be leaving Netflix in droves, but the company will point to the competition and/or ‘piracy’ as the cause, not their own anti-consumer practices.

This comment has been deemed insightful by the community.
Wintermute (user link) says:

I have been a Netflix customer since they only offered DVDs by mail. My wife and I are currently separated with split custody of our children. I have four streaming services I pay for so that the kids have plenty of entertainment, and all accounts are set up on all their devices, regardless of which home they are in. If Netflix tries to squeeze me for more money because my kids use our account from multiple locations, after recently having hiked their rates yet again, and I unable to get around the restriction via a VPN between the two homes, I’ll gladly drop their service.

migi (profile) says:

Crunchyroll, an anime streaming service, recently announced a price cut for most (but not all) of the world. Also it looks like they are switching to local currencies rather than USD, which protects customers from bank charges for using a foreign currency.

However relatively few anime are licenced by more than one platform, so if customers switch from one to the other, they lose access to different shows.

ECA (profile) says:

You got most of it.

“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.”

WHy the hell do you NEED to sell Stocks in a company thats doing well?
Its a Builtin trap.
It wasnt designed as a Long term Mortgage that you pay Pennies forever.

To many corps have over inflated the value of the corp, and based the Stocks on that value. Then keep forcing it up to sell more stocks.
AND there isnt 1 type of stock. Those on the Stock market, Mostly, DONT share Power/ownership IN the companies. Internal ones that Only the owner, CEO, and top wage earners get, SHARE the power. They can Never loose the company.(go look up What a Stock can say or do). ITS CRAP. Its BROKEN. Its a side game.
And if the corps were ever told to buy back all of there Public stock, most would go broke. THAT isnt what it was created for.

Its also a good reason to raise prices on good, all the time JUST to pay a small dividend to consumers, and a LARGE increase on Internal stocks, they USE to pay the top wage earners..(taxes on them are less then Taxes on wages)

Anonymous Coward says:

I have never been a customer of Netflix, it is unlikely I ever will be. I simply don’t watch enough tv to make paying for it a value to me.

I have an antenna for local news and Roku for the occasional movie. Other than that I have little interest in tv other than for background noise. A radio, which is free, was for years the background noise.

These pay for subscriptions just don’t fit my life style, be it cable or otherwise. Jacking prices and nickle and diming are sure fired ways to ensure I stay just the way I am without spending any more during times of inflation.

Most corporations overvalue themselves and their products. I see little need to feed that insatiable greed and certainly not for things that go up in price without an equivalent value to justify the increase.

That Anonymous Coward (profile) says:

Because demanding to control where your customer can use the thing they are paying you to provide ALWAYS works out so well.

If I am paying you for 3 streams, why does it matter where I use them?
Unless of course you arr just trying to kill off more of your customer base by being irritating pretending that somehow me using the 3 streams I pay for is costing you something.
Its not, you just want to create “more customers”…
If they are sharing someones password & using one of those streams had you considered they might be doing so because they can’t afford your service?
Or perhaps a student away at school should have no problem using one of the the family accounts streams, but oh no you now think this is a huge sin.

Stop changing the ‘rules’ of the game & get realistic.
If they are paying you for x streams and only using x streams whats the real problem other than your imaginary profit margin.

nerdrage (profile) says:

here's the part you're missing

Netflix charges very different rates in different parts of the world.

They have tapped out their most lucrative market, North America. Latin America (where all the password sharing crackdown is happening) is the least lucrative. Netflix gets 60% per customer there compared with North America. And it’s even worse than that, due to the strong dollar.

Netflix now faces encroaching competition and subscriber churn in their most lucrative markets while needing grow in the least lucrative. So they’re trying to squeeze out every last penny they can. I doubt they have the option to raise prices in Latin America and Asia from the rock bottom levels they are now at, so they’re trying password crackdowns and ad tiers.

I also think they just need to cool it with the wild content spending. Their dilemma there is, they spend wildly because they have no idea where their next hit is coming from. And they face more efficient competitors like Disney. All Disney has to do is slap Marvel or Star Wars on something and it’s a hit, even when it’s garbage like Obi Wan.

Netflix seems to be in a trap and it’s not clear there’s any way out for them. I can see why Disney, HBO Max, Apple and Amazon will all be successful at streaming but Netflix…not so sure.

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