Netflix password sharing is widespread in the streaming giant’s domestic market. That’s according to new data from Leichtman Research Group, which shows that about one-third of Netflix subscribers in the U.S. share their login credentials with someone else. Some important numbers are needed, however, to put this 30% password sharing estimate into context.
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Currently, Netflix has penetrated nearly 70 percent of broadband homes in the United States. In the U.S. and Canada, the streamer has about 74 million subscribers. However, subscriber growth is leveling off, which is not good news for the $18 billion annual budget that funds the streamer’s original content. A solution? For starters, the streamer could always go after the freeloaders.
If you’re one of them, we’re still far from having to worry. Although tons of people are already doing it, anyway.
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Does Netflix allow password sharing?
Before we get into that, let’s note a few important points. Netflix offers tiered pricing plans that allow two or four simultaneous Netflix streams, depending on the plan you choose. This includes allowing password sharing between at least some Netflix users.
However, Netflix’s terms of service are also explicit. “The Netflix service and any content accessed through it are for your personal, non-commercial use only and may not be shared with anyone outside your household.”
In an announcement on Wednesday, March 16, Netflix announced it would begin motivating certain password sharers who do not live in the physical household of the primary account holder to pay. This practice affects “our ability to invest in new TV shows and movies” for subscribers. That’s according to Chengyi Long, director of product innovation at Netflix, in a company press release.
“Beware Netflix ... you are not indispensable.”
While this crackdown on Netflix password sharing is only starting in three Latin America countries (Chile, Peru and Costa Rica) for now, that hasn’t stopped American subscribers from expressing their outrage. This is just the first step towards the more comprehensive targeting of freeloaders closer to home.
“Be careful @netflix,” warned one Twitter user. “A monthly rate increase followed by a crackdown on password sharing? I like you, but you’re not indispensable. Listen to real people instead of your boardroom echo chamber.”
As this example shows, the tricky part here for Netflix is that customers aren’t looking at ads like this in a vacuum. People will consider this ad along with the cancellation of their favorite show. But also to the reality of rising prices, and the ongoing calculation of perceived value. Alex Parrella, a 33-year-old subscriber from Massachusetts, told Time magazine that the latter part is exactly what he’s wondering.
“If prices keep going up, I’m not sure it’s worth it to me,” he said.
What’s coming up
As part of the aforementioned password news, here are the two new features Netflix says it’s launching. And, again, these features are only launching in a few specific countries. Not, for now, in the United States.
Add an extra member: Subscribers to Netflix’s Standard and Premium plans will add sub-accounts for up to two people they don’t live with. Each of these accounts will have their own profile. Each of these accounts can have their own profile, along with their own personalized recommendations, login and password. And, continues the Netflix announcement, “at a lower price: 2,380 CLP in Chile, 2.99 USD in Costa Rica and 7.9 PEN in Peru.”
Profile transfer to a new account: Also, according to Netflix, subscribers to the streaming platform’s Basic, Standard and Premium plans can allow people who share their account to transfer their profile information either to a new account. Or to an Extra Member sub-account. This transfer also keeps the account’s viewing history, My List and personalized recommendations.
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