Technology

This is how Netflix will work after the decision not to allow users to share passwords

Netflix will charge extra to those who share their passwords.  (photo: Millennium)
Netflix will charge extra to those who share their passwords. (photo: Millennium)

Netflix currently has 222 million subscribers worldwide and an estimated 100 million more households use the service with a shared password.

You just have to see a tweet from 2017 where the giant of the streaming he even encouraged practice; but now, coupled with the loss of subscribers in its last quarter (for the first time in a decade) and the drop in revenue, it seems that Netflix is ​​looking to end the password sharing option.

Netflix on Twitter.  (photo: Twitter)
Netflix on Twitter. (photo: Twitter)

Three initial countries where this radical change has already been tested on Netflix

Initially, Netflix has already tested its new strategy with users of Chili, Costa Rica Y Peru. The platform allowed subscribers of its service to share their passwords with people outside their homes, “in a simple and secure way”, although they also had to pay more to do so. so stated Chengyilong, director of product innovation at Netflix.

So, Netflix enabled a new feature in the mentioned regions to “add additional members”. It was available in the Standard and Premium plans of the service Y allowed to add up to two additional users who do not live in the household.

These people had their own logins, recommendations, and profiles within Netflix. However, such amenities come with a price increase. According to Variety, the additional cost per new user was PEN S/. 7.9 for Peru, USD$ 2.99 for Costa Rica Y CLP 2,380 for Chile.

Table of prices in Peru, Costa Rica and Chile of Netflix.  (photo: Variety)
Table of prices in Peru, Costa Rica and Chile of Netflix. (photo: Variety)

Ultimately, this turned out to be result in the account holder having to pay more for each “sub-account” or shared user to make up for lost income.

“If you have a sister, say, who lives in a different city, and you want to share Netflix with her, that’s great,” he explains. Greg PetersNetflix COO, during the presentation of results.

“We’re not trying to shut down that exchange, but we’re going to ask you to pay a little bit more to be able to share with her and to get the benefit and value of the service, but we also get the revenue associated with that viewing,” he adds.

Netflix.  (photo: REUTERS/Dado Ruvic)
Netflix. (photo: REUTERS/Dado Ruvic)

Netflix has a year to plan its project well

Netflix hasn’t made it clear how much revenue it expects to generate from executing this strategy, but it has given a possible start date for your plan to cancel joint accounts. According to Peters, it seems that this new direction will be implemented globally in 2023.

“We’re trying to find a balanced approach,” explains Greg Peters. “To set your expectations, I think we’re going to spend a year or so iterating and then implementing all of that so we can launch that solution globally, including markets like USA”.

“As we work to monetize the exchange, average membership revenue growth, revenue, and viewing will become more important indicators of our success than membership growth,” Peters says in the letter to shareholders.

Netflix logo.  (photo: REUTERS/Dado Ruvic/Illustration)
Netflix logo. (photo: REUTERS/Dado Ruvic/Illustration)

What is really striking, as revealed by a time2play Studio, is that this seems to be the only solution that the streaming giant needs to end shared passwords. The survey shows that nearly 80% of Americans who use someone else’s password would not create their own account, so no new users would join if that option was removed entirely, unless they became one in that practice.

At the moment, there are some outstanding issues that will be resolved as we get closer to the final implementation, such as what could happen if the joint account holder decides not to pay the additional feefor example.

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