Only 8% Of Netflix Password Moochers Plan To Pay For Their Own Subscription
from the this-could-backfire dept
Netflix’s new password sharing crackdown is a dumb cash grab. It’s unnecessary, confusing, risks annoying subscribers, duplicates existing monetization efforts (Netflix already forces you to pay for higher tiers of service if you want simultaneous streams), contradicts years of Netflix’s stated position on the issue, comes on the heels of other price hikes, and the company’s projections of how much money it stands to make don’t appear rooted in reality.
Netflix’s plan, as it currently stands, is to try and force people using somebody else’s password to either pony up money for their own account, or force the original account holder to pay $8 extra per moocher. But a survey from the folks over at CordCutting suggests that only eight percent of those folks using somebody else’s password plan to pay for their own service:
Just 8% of these unauthorized Netflix users plan to pay for their own accounts now that Netflix has cracked down on password sharing. This could lead to an additional 1.7 million paid users. The rest say they will attempt to keep mooching or just stop watching Netflix.
So many of these folks sharing a password are kids or students, or just not serious enough about watching Netflix to buy their own account, and inventing entire systems to bully them about it seems counterproductive. But the study also found that as many as 23 percent (15.2 million people) could quit Netflix over the company’s password sharing crackdown:
The rule changes could also backfire on Netflix, at least in the short term. While the majority plan to keep their subscriptions, 23% of paying users say they’d like to cancel their accounts in response to the new policies. That’s as many as 15.2 million people who could cancel their Netflix subscriptions.
It should be made clear that despite what press outlets are saying, I’ve seen no evidence that Netflix is actually cracking down yet. They mostly appear to be seasoning the water and getting users ready for the possibility they’ll be charged extra. It’s still possible for Netflix to back down, or for this to go so sideways technically forcing a tactical retreat (similar efforts in South America have been a hot mess).
Now again, I don’t think this whole effort will be at all fatal for Netflix. The service still provides a decent value proposition, especially when compared to traditional cable. But the fact that Netflix was surprised when nearly one million users in Spain cancelled the service over the password sharing crackdown suggests they’re being willfully oblivious about its potential impact.
Also, the password sharing efforts is just one part in a growing mountain of evidence that Netflix just isn’t the innovative, consumer friendly company it used to be, which will continue to manifest on other fronts.
That became obvious when the company discarded its policies on net neutrality once it was big and successful enough to not longer be impacted. And it’s gotten worse as the company has shifted its focus away from innovation, disruption, and creativity, and toward shoveling out high volume dreck aimed at the lowest common denominator.
Netflix will soldier on, but it’s going to piss off a lot more users than it thinks. And it’s giving a competitors a chance to gain market share simply by being less annoying.
Filed Under: cable tv, password sharing, price hikes, streaming, video
Companies: netflix
Comments on “Only 8% Of Netflix Password Moochers Plan To Pay For Their Own Subscription”
Meanwhile, I am handing Google and Amazon money WILLINGLY by watching streams and videos on Youtube AND Twitch respectively.
No annoying hidden fees (for the most part), and even Twitch is starting to run banner ads on their mobile app.
Worst thing I can think off is unskippable ads and having to spend DOUBLE or more money just to give a content creator money.
Look at it like a CEO
To the CEO mindset, that’s not ‘only 8% will get an account’, that’s ‘we will increase the number of previously non-monetizable users by 8% of the total’. Rely on inertia to keep a large portion of users who otherwise polled as ‘will cancel’ and they see nothing but a net gain.
The goal of any for-profit corporation is to increase profits this quarter (and only this quarter, who cares about the next?), not to create and support a viable product.
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Yes, if that 8% lived in a vacuum. I was paying for a higher plan for ‘more screens’ that I shared with immediate family members.
As a group, it was worth it. In my household alone we don’t watch enough to keep it. So instead of gaining $8/month, they are losing $20/month because I cancelled my account when my Mom got the notification this weekend.
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8% of a subtotal, because only a subset of accounts have a “moocher”. If we guess 20% of accounts are used this way, the subscriptions would increase by 1.6%. But that’s a gross amount; as Scott notes, the net amount has to be adjusted for cancelations and plan-reductions.
And then we’ve got a problem similar to cable TV: when kids move out of their parents’ houses, lacking money, they’re just gonna get used to not having Netflix. When they can later afford it, they probably still won’t subscribe, having found alternate ways to get TV or alternate things to watch (or listen to, or read). It won’t be “cord-cutting” or similar because it won’t be caused by cancelation; this will make it harder to measure, and harder to avoid via “retention deals”.
I suspect Amazon could benefit the most. They’re apparently okay with sharing, and sarcastically referenced Netflix’s old “Love is sharing a password” tweet in relation to the crackdown. And a lot of people have been paying for Prime for other reasons, not even using the included streaming service. I helped 2 people set it up on their TVs recently; they’d each been Prime members for years and wanted to watch a series that wasn’t available on Netflix. (And as it turns out, Amazon makes it much easier to find good shows/films, whereas I have to assume Netflix is pushing whatever has the lowest licensing costs.)
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“Amazon makes it much easier to find good shows/films, whereas I have to assume Netflix is pushing whatever has the lowest licensing costs”
It’s all down to taste, but the problem with Netflix is usually that they have plenty of good stuff on there, but they only tend to push whatever the new “Netflix Original” is and lots of stuff gets almost silently added. I’ll always recommend using JustWatch to find content – not only can you search for where specific titles are available, if you set the services you have access to and look at the “new” page, you’ll see a lot of stuff you wouldn’t necessarily know was on them otherwise.
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This appears to be a rating service that knows which videos are on which platforms. While useful, it would involve giving up on the Netflix interface entirely, which is kind of the problem. We’ve got the family sitting around a TV, and now we’ve gotta put someone on laptop or phone duty to find something to watch. Despite that tempting “Netflix” button on the remote.
Amazon, by contrast, has the IMDb ratings right there (and possibly critics’ ratings?; it’s been a few months since I’ve used it). It’s down to taste, as you say, but I find that much more useful than what Netflix offers in its place: absolutely nothing.
I’m interested to see the other, real stats – how many of these people were actually “moochers”, and how many were people falsely accused of such because they had slightly different usage patterns. Forget the obvious outliers like “family gives password to grandmother who watches occasionally but can’t afford their own sub”. I mean people who have genuine reasons to be accessing the account they pay for outside of their home location while others in the home watch from there.
The PR goons will be trying to spin this as people sharing accounts with 5-10 other people as a way to avoid paying, but the reality is probably more like they’re attacking customers who are using their own paid for service in ways that were acceptable to Netflix until very recently, and they’re not falling for a shakedown.
Just putting out the notices are costing them users. Source: me. THey have to go through with this just to justify losses they are already taking as a result of the announcement.
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It was a contributing factor to me recently cancelling my subscription. I’ve paid monthly for years but with various cancellations, changes in actor (i.e. The Witcher) and this nonsense I decided to drop it.
I’ll keep a list of stuff on Netflix I might want to watch and once there is enough of it I’ll sign up for a month, watch it and then cancel again.
My predication is their next step will get trying to get people to commit to year long deals rather than monthly amounts to try and counterbalance people like me.
Now again, I don’t think this whole effort will be at all fatal for Netflix.
A lot of things don’t have to be fatal for a lot of companies, but C-level parasites and the stock markets act like it is bloody, brutal murder.
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“Fatal” is simply the wrong standard by which to judge such things. Remember that Netflix’s DVD-by-mail service remains alive till September 29th. A business can stay in that not-quite-dead state for a very long time.
Canceled my account
I was paying 19.99 for years for 4 simultaneous screens for my wife and I and her mother. I already didn’t use Netflix too often anyway with all the other options, so when this came out I canceled the account and told them why. I paid for 4 streams and don’t need that with only 2 people and we don’t even watch it that often so they go from $20/month to $0 as my mother-in-law isn’t interested in her own account either.
I will cancel
I pay for the max 4k most screens or whatever they have. Why on earth would I pay $8 more just to use what I am already paying for? They have raised the price a couple of times on me already and now they want to do it again by calling it a different name. I got rid of cable and I’ll get rid of Netflix.
say it with me now...
“quarterly gains”
That’s all this is about…pleasing the shareholder. It’s fine (in fact, normal) for businesses to make profits, but ever-increasing-profit-every-quarter-fOrEVeR is Impossible. There’s gotta be another way to get enough investor $$ so that you can expand your company without selling out to Wall St.
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I’m sure Valve was able to crack that code…
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One always has to ask:
“What behaviors and strategies do the wages, performance bonuses, stock options, and similar benefits listed in the C-suite executive compensation contracts, actually reward?”
Of course, the follow-up question is also important: “Are those metrics actually conducive to the long-term success of the company?”
It’s true
I e already run into the issue with my account.
I’ve been with Netflix since the yellow envelope days.
While travelling I found that my account worked fine on cellular. As soon as I turned on hotel wifi I got a notice that the content wasn’t available. (International).
Their losses will be much higher than they think!! For two reasons.
9:10 Netflix “exclusives” aren’t exclusive, rather locally exclusive distribution. Quickly searching around on the internet will show LEGAL options elsewhere .
Much of the Korean content can be picked up from a Korean streaming distributor that has internet rights and is happy to sell services to us users.
Nearly all Indian content is on Eros or Value
Hong Kong media can be streamed from celestial. Etc etc
Netflix doesn’t have much for US exclusives. It’s all available for free streaming or low cost purchase.
And the grey market disc to digital option.
Multiple legal disc to digital services let you scan a barcode and purchase a digital version for minimal cost. In many cases under $1
They say it’s supposed to be your own disc, not one at the store isle, but the TOS doesn’t really make that a requirement. Especially when more than one company has ASIN to UPC converter tools on site. That single killer film you must subscribe for? Is $3.99 or less.
Netflix is going to die if they don’t make a partnership or drastically change something very soon.
There’s a reason there is a growing stock holder push to join prime video.