March 16, 2021
Streaming services have a love/hate relationship with account sharing. On the one hand, they realize that not everyone who wants to use their service has the money to do so. On the other hand, if more people signed up for their own accounts, they'd make more money. Netflix, in particular, has rules against password sharing, but it hasn't enforced them. Until now. However, the hand-wringing bout the company's new clamp-down efforts may be premature.
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Streamer's Spotlight: Netflix's Crackdown on Password Sharing Isn't All Bad
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Well, it looks like Netflix has finally made its move. After improving its geographic content blocking efforts several years ago to prevent region hopping, the company is now coming for the password sharing ecosystem that technically breaks its ToS. In reality, however, those who pay for Netflix accounts should be cheering the effort.
Let's Face It: Password Sharing Costs Netflix Money
It's probably a bit of a stretch to call password sharing outright theft. After all, Netflix has simultaneous streaming limits in place. Those limits, depending on the subscription tier, are what an individual account owner is paying to receive. So if they're sharing a password on the Basic tier, only one person can watch at a time. Allowing someone else to watch while you're not using your account could hardly qualify as theft in the traditional sense of the word.
However, without password sharing, many individuals who would otherwise pay for accounts get skirt by saving themselves a few bucks a month. At least one study shows around 33% of Netflix users share their passwords with at least one other person. At $8.99 per month at a minimum, that means Netflix's unrealized subscription profit could be in the hundreds of millions of dollars per year.
Password Sharing Crackdowns Could Reduce Price Increases and Increase Content Budgets
Let's play with a hypothetical. Let's say Netflix is suddenly sitting on an extra $100 million per year in subscription revenue. What could it do with that money? Not raise subscription prices, for one thing. The company has taken a fair amount of heat for increasing prices, especially on US customers.
The company technically has a negative cash flow as it's spending big on original content. Having some extra liquidity would be a boon for the company, obviously, but have positive effects for customers, as well. More money in Netflix's pocket means more money the company has to spend on the things customers want, and less impetus to increase prices to get that money.
Alternatives to Password Sharing
Netflix could, of course, throw its freeloading customers a bone. Their saving grace could be a built-in "Watch Together" feature. Disney+ now includes a party watch feature, and there are multiple third-party apps available that allow Netflix account owners to watch with friends and family.
Netflix is missing a huge opportunity by lacking this feature, but knowing the company, it's likely going to roll out that feature sometime this year after its password sharing crackdown is in full force.
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This Week's Streaming Guide
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1. Michelle Obama Makes Her Netflix Series Debut
The former First Lady hits the Netflix web waves with her new kids' show Waffles + Mochi today, March 16. - Watch on Netflix
2. MCU Continues on Disney+ With 'The Falcon and The Winter Soldier'
Can Disney+ continue the win it had with WandaVision? Find out this Friday as it's new show The Falcon and The Winter Soldier premieres this Friday, March 19. - Watch on Disney+
3. Even More 'Doctor Who' to Love this Sunday on BBC America
An animated version of the 5th Season penultimate episode of Doctor Who's 5th season, watch as the tense action makes its way to BBC America this Sunday, March 21. - BBC America Live Without Cable
4. ''Hoarders' Returns for Season 12
Sometimes you just have to let go. Or maybe not? Hoarders season 12 returns Monday, March 22 to A&E at 8 PM EST. - Watch A&E Without Cable
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News and Industry Developments
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1. Netflix Password Sharing Crackdown Is Underway
Attempting to watch outside of the same household now comes with a warning message. - Fox Business
2. Disney+ Has Topped 100 Million Subs
Without a doubt, the company's service has been a success. - NBC News
3. ESPN+ Now Available on Hulu
This expands where you can access ESPN+ beyond the ESPN app. - ESPN
4. Why Yes, There Is a Cord-Cutting ETF You Can Invest In
With cord-cutting taking off, this ETF is hoping to capitalize on the trend. - ETF Trends
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