Netflix lost last quarter 200,000 paying subscribers, while it was expecting an extra 2.5 million. The company fell sharply on the stock market and a change of course is on the horizon: Netflix is now really going to tackle account sharing. Since last month Netflix is already testing that in Chile, Costa Rica and Peru, within a year Netflix aims to tackle password sharing worldwide.
Netflix then increases the price for people who share their accounts, which Netflix can see from the user’s IP addresses and device information. “We have to make money from them,” Netflix CEO Reed Hastings said of 100 million people who are still piggybacking on someone else’s account.
This will soon be done by either making the owner pay more, or by deterring that owner and stopping the sharing of login data. Incidentally, during its years of strong growth, Hastings has regularly called account sharing “a positive thing.” The company has 221.6 million paid subscribers.
About 34 percent of all Dutch users of streaming services are watching on someone else’s account, it turned out at the beginning of this year research from the comparison website Pricewise.
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Ads negotiable for the first time
Netflix is also likely to experiment with ads. CEO Hastings was strict against advertising on Netflix for years, but is now coming back to that. “I’m a big fan of the simplicity of subscriptions,” Hastings says. “But I’m even more of a proponent of consumer choice and allowing consumers who tolerate ads at a lower price.”
Netflix is not the first streamer to come up with a cheaper subscription with advertising. Videoland has been doing it since 2020Disney+ will follow later this year and in the US there are already several services with cheaper advertising plans. For Netflix it is a turning point: Hastings has denied rumors in recent years that Netflix came up with such an advertising model.
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Netflix currently offers three plans, with differences in picture quality and the number of profiles that can watch simultaneously. The cheapest basic subscription costs 7.99 euros per month, the most popular standard subscription costs 11.99 euros per month and the premium subscription with 4K quality costs 15.99 euros per month. This makes Netflix the most expensive of the major video services.
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