Netflix is still facing stiff competition from other streaming platforms as its subscription numbers plateau, prompting it to capitalise off the subscribers it already has. — AFP
Maybe true love isn't indicated by sharing Netflix passwords anymore.
Last week, Netflix announced a tightly enforced crackdown on password sharing, prompting swift backlash from customers across social media. A day later, the company backtracked, saying the policy was posted in error wasn't meant for the US. The webpage announcing the policy was scrubbed, but the damage was done online and misinformation continued to swirl.
On social media: Sceptics discussed if the mishap was a true accident or if the online backlash from users caused Netflix to backpedal.
For now, things are status quo for American account holders. But new rules and changes to the streaming platform being introduced elsewhere hint that changes in the states may be imminent. Here's what we know.
What happened?
Jan 31: Netflix altered its support page mentioning plans to bar users from sharing an account with people outside their immediate household.
The new policy: The support page at the time said users would have to establish a "primary location" and needed to connect to their home WiFi and log on again "at least once every 31 days" or risk being "blocked."
From that moment on: People on social media expressed concern, contempt, and confusion over the changes. They asked how it would impact accountholders who use Netflix when they travel or kids who live away from home for college.
Feb 8: Netflix rolled out its new policy in Canada, New Zealand, Portugal, and Spain — similar to the one it retracted in the US. The policy was already in place in Latin America. The policy limits sharing an account to a local "household."
How does the policy work in those countries? If a user does not live under the same roof as the main account holder, they are prompted to launch their own Netflix account. Through new updates to the platform, that user's lists and watch recommendations will follow them from their previous household account to their new separate account. Households also have the option of paid sharing, where they can pay a reduced rate to "add an extra member," to their account. This is similar to the family plans offered by Spotify.
Why is Netflix changing things?
The company says the policy changes are being made to increase profits and invest in "great TV and films." The changes come at a time when streaming platform competition is stiff. In 2021, Netflix came in fourth for TV and streaming gross revenue behind Disney+, HBO Max, and Hulu, respectively.
Netflix is still facing stiff competition from other streaming platforms as its subscription numbers plateau, prompting it to capitalise off the subscribers it already has. Disney+, Hulu, and ESPN+ tout a bundle pack as well as ad-supported tiers, unlike Netflix. HBO Max has also climbed up the ranks with record-breaking original series including House of Dragon and The Last of Us.
Chengyi Long, Netflix's director of product innovation, said back in March that Netflix "always made it easy" for household members to share their account with different profiles for respective family members. Long added that Netflix had created confusion about when and how subscribers can share accounts.
What's happening now?
No immediate changes have been implemented for Netflix account holders in the United States. Still, the policy changes elsewhere provide a glimpse at what changes could be on the horizon, tech experts say.
Currently, Netflix's US policy pages say that one account is only meant for people within that primary household. Still, sharing accounts is an easy practice, which has become a problem for the company financially and has resulted in stagnant subscription numbers.
In Costa Rica, Chile, and Peru, the platform's policy says users are required to pay to add access for extra members outside of their households. The platform uses IP addresses, device IDs, and account activity to know if someone else is using the account.
"Today's widespread account sharing (100M+ households) undermines our long term ability to invest in and improve Netflix, as well as build our business," Netflix said in a fourth-quarter earnings letter. "While our terms of use limit use of Netflix to a household, we recognise this is a change for members who share their account more broadly."
A Netflix spokesperson told The Verge that they expect to start "rolling out paid sharing more broadly." – The Philadelphia Inquirer/Tribune News Service
