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So remember back in March of this year when we reported how Netflix was looking to crack down on the All-American past-time of sharing your Netflix password among families & friends? Well, it looks like 2023 is the year that the streaming service is looking to get really serious about it, according to a report in The Wall Street Journal (though Netflix declined to comment on its reporting). And Netflix Co-CEO Ted Sarandos is already preparing for a pushback, telling investors earlier this month, “Make no mistake, I don’t think consumers are going to love it right out of the gate.” But at a time when the streamer is looking to boost both revenue and subscriber numbers, Netflix looks at a potential additional $721M in revenue next year in the U.S. & Canada if they can hit the brakes on password-sharing (according to estimates from analysts at Cowen Inc.). But as Neil Macker, senior equity analyst at Morningstar, offered in the WSJ report, “It’s a boost and it can definitely help, but it’s also a one-time boost,” cautioning that too severe of a move could drive higher subscription cancellations than Netflix expects.
Earlier this year, Netflix began test-running a new service where subscribers could pay to share their login intel. Subscribers in Chile, Costa Rica & Peru can add extra subscribers for an additional cost of 2,380 Chilean Pesos (or $2.97), $2.99 in Costa Rica, and 7.9 Peruvian Sol (or about $2.11). To complicate password-sharing, any user logging onto Netflix who isn’t the primary account holder or listed as a paid account is asked to enter a verification code, which is sent to the primary account holder. But Netflix still has a number of very real-world issues to overcome. Right off the bat, the streamer will have to differentiate between an account holder who’s traveling & looking to access the service from a temporary location. And then there’s the matter of divorced/separated families where children divide their time between households and how it will be able to verify authorized access. And when you move the conversation onto the global stage, markets such as India find viewers accessing Netflix on their phones by streaming over cellular networks (as opposed to WiFi or wired broadband), further complicating user verification. And then, there’s the overall concern that with so many streaming options, viewers will ditch Netflix for a number of other options. And now, let’s take a moment to appreciate that moment in 2017 when Netflix had a much more open-minded approach to password-sharing…
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