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the key is in your debt

27 mayo, 2021

Yesterday we learned that Netflix is ​​trying, through a test function, to limit the behavior so common in that and other password sharing platforms to divide costs. It is something that until now has been allowed, and that conditions such as being able to have up to four simultaneous screens and five profiles have led.

The feature you are testing restricting shared accounts with indicates that “if you don’t live with the account owner, you need your own account to continue watching“contents. As options, if it is yours, the application allows in the test to verify yourself by receiving an email, a message or to do it later.

The company has stated to the Hollywood Reporter that the function “is designed to help ensure that people who use Netflix accounts are authorized to do so.” But, because right now? Let’s see how Netflix has changed its position on this issue and possible causes.

Netflix tries to limit sharing account, something with which it has come to joke and even promote

That Netflix is ​​testing the function with which only users who live under the same roof or under the same IP address is not surprising, because it’s something we’ve already seen prove and to other companies such as Spotify, which although it is not exactly the same sector, does have family accounts with a similar effect on their income.

However, it is shocking that Netflix does this now when until relatively recently, on social networks such as Twitter, password sharing has been something Netflix has joked about and we might even say, promoted, based on how you have responded to some users or quoted some tweets. A good example of this is this tweet from Netflix India in January 2020, the closest case we have seen in time. It means “This is absolutely false. If you want Netflix for free, use someone else’s account like the rest of us.”

But there are many more cases, like this one, where there is talk of sharing a password in what seems to be a reference to couples who do not live together, because otherwise “lawful” password sharing is normal and fair for what profiles and simultaneous screens are supposed to do. “Love is sharing a password.”

And, in this sense, no lack of examples in spanish:

Netflix

And an example from 2018 where it is praised (although always in a joking context) that friendship is sharing Netflix password. And there is no mention that they are roommates who share an account as if it were from the same household:

An example where the case is not even described, it is directly urged:

And finally, a case where Netflix acknowledged knowing that people shared their passwords and still did not complain:

What Netflix Can Learn From Other Platforms That Limit Shared Accounts - These Are The Most Common Restrictions

It is Netflix who has changed his mind (although not his conditions), not the user

Netflix Mobile

A problem with the interpretation that Netflix has on this matter (the statement to Hollywood Reporter “to guarantee that people who use Netflix accounts are authorized to do so”) is that in their terms of use it is very ambiguous with respect to what they have historically defended for people who live in another house.

Point 4, for example, establishes that the service is non-transferable and that “the contents cannot be shared with individuals outside your home.” In point 5, for example, it is not forbidden to share the password, although it is recommended that not for security.

  1. The subscriber who has created the Netflix account and whose Payment Method is charged (the “Account Holder”) has access to the Netflix account and control over it as well as the Netflix-compatible devices used to access our service. , and is responsible for the activity that takes place on said Netflix account. To maintain control over the account and prevent anyone from accessing it (which would include information about the account’s viewing history), the Account Holder must maintain control of all Netflix-compatible devices used to access the account. service and not reveal to anyone the password or the details of the Payment Method associated with said account. You are responsible for updating and maintaining the accuracy of the information you provide us about your account. We may terminate or block your account to protect you, Netflix, or our partners from identity theft or other fraudulent activity.

Beyond the ambiguity, the terms have not changed since 2020 nor has Netflix said until the start of the trial anything to reflect that contractually sharing password is now wrong. And we’ve already seen how, even in early 2020, the company promoted using someone else’s account.

Although it was almost always in a humorous tone, we interpret, it did not stop being a wink for people to continue as until that moment. Otherwise, it would have been publicly denounced and prevented earlier.

Debts to settle based on trying to achieve greater growth in users, with stagnant income for each user

Netflix

In February 2019, when Netflix had 148 million users, compared to now, which has exceeded 203 million, a study claimed that Netflix was leaving 2.3 billion euros a year with an identifiable cause: users who did not pay to the use other people’s accounts.

Specific, They estimated that one in five users did not pay. If we extrapolate to the current number of users with the same account that the study made, it would come out that Netflix currently stops entering 3,892 million euros. To do this, the study considers that every user who stops paying for sharing, would subscribe to an individual subscription of the basic plan if password sharing was prevented.

Regarding that moment, it is not that anything has changed for the company, but the truth is that has not stopped investing in productions, and its long-term debt, although sustainable, has been skyrocketing since 2016 to 2017 multiplied by two. From 2019 to 2020, yes, it grew by a small percentage, in just over 1,000 million euros. But we are talking about 15,809 million.

However, the problem is that to enter more, Netflix doesn’t have many more keys to play than raising prices, which is something he’s done recently in America and it seems likely to happen here soon. There this strategy has worked, as the average revenue per user has gone from $ 10.28 in the fourth quarter of 2017 to $ 13.51 in the fourth of 2020.

Despite having a very healthy growth in users, these Netflix measures make it clear that it is not enough to be sustainable

However, there are markets such as Latin America in which, in the same period, it has gone from entering $ 8.69 per user to $ 7.12, something quite troublesome. In Europe, a market encompassed in Europe, the Middle East and Africa (EMEA), in the same period it has gone from $ 9.94 to $ 10.72, despite price increases. In Asia-Pacific, given that it has had to grow based on cheaper plans, it also earns less now than at the end of 2017 per user.

In this sense, with measures such as trying to restrict the sharing of passwords, the recipe that the company has in mind seems clear: if there are markets in which it is very difficult to raise prices, we will have to get more users to pay current average prices. And that is achieved, among other things, by making the functions that now allow account sharing say goodbye.

Here's how Netflix makes money: when 192 million subscribers are not enough

Almost two years ago we said that cheap Netflix for mobile in India was proof that 151 million subscribers were enough. With Netflix’s debt level, and what it continues to invest in content, it is clear that if you bet on finding more customers with measures like these, or on entering more for each one by raising prices, it is that still not enough.