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from the maybe-they-could-sell-blue-checkmarks-instead dept.
The plan is to try to force Netflix customers to pay an extra $2-$3 every month for service for any users using your credentials outside of the home. An accidentally leaked Netflix help guide last week indicated that users who don't log into their Netflix account in a 31 day period would face the new surcharges, something that didn't go over well with either users or celebrities that travel a lot.
The company was then forced to backtrack, stating the guides were posted in error, and intended for customers in countries like Chile and Peru where the crackdown had already launched. Those efforts, as we'd mentioned previously, were also reportedly a confusing mess for subscribers in those countries, who say it was never really clear how the inconsistently-enforced system actually worked.
Netflix is embracing the move because the company's growth has hit a wall internationally, forcing it to begin nickel-and-diming existing subscribers if Wall Street is to get its improved quarterly returns.
[...] The question then is: is that modest bump in revenue worth alienating and annoying your existing customers in a competitive streaming market? We're apparently going to find out.
To be clear, I still think Netflix has value at its current monthly rate, and many people who complain about the new rate hikes are lazy and likely won't cancel. On the flip side, this move remains the latest signal from the company that it's done with being innovative and disruptive and has, as publicly traded companies usually do, shifted toward nickel-and-diming and turf protection as it attempts to fend off competitors.
Previously:
Netflix Fights Password-Sharing With Test of $3 "Extra Member" Fee
Netflix to Start Testing Warnings for People Borrowing Login Info
(Score: 2) by owl on Thursday February 09, @04:28PM (5 children)
For anyone paying attention, that is.
Netflix was, for the most part, first here. Both with the DVD rental by US mail and then by digital streaming over the internet.
By being first, that also meant that they gained profit by growing new users/viewers quarter over quarter.
But, as the summary above states, their "new user growth" has stagnated. This is likely for many reasons. One, most everyone who wants a netflix account likely has one by now. Second, the proliferation of other competitors means they are no longer the "only game in town" so new user growth further stagnates.
When you can no longer depend upon revenue growth from new user signup's, what do you have left? Well, you either spend down to bankruptcy, fire 50% of your tech staff (which just likely delays bankruptcy, not avoids it), or you try to find ways to milk your existing customers for more money.
Every "shared password" is being viewed by netflix through the RIAA/MPAA lens of "every copy pirated is a sale we didn't make ourselves" which is why they are heading down this path. To them this probably seems less egregious than going after other customers for "more money" because arguably the password share folks are breaking one or more rules in the netflix user agreement.
But, they are going to likely discover two facts. One, there is again another limit to revenue growth once all shared passwords are gone. And two, not all shared passwords is a "lost sale". Some portion of those shared passwords will not sign up, they will just stop watching netflix for free.
(Score: 2) by mcgrew on Thursday February 09, @05:34PM (1 child)
When you can no longer depend upon revenue growth from new user signup's
Do you own a grocery store? [angryflower.com]
Carbon, The only element in the known universe to ever gain sentience
(Score: 2) by maxwell demon on Thursday February 09, @07:23PM
So you say new user signup cannot grow?:-)
The Tao of math: The numbers you can count are not the real numbers.
(Score: 2) by ledow on Friday February 10, @08:21AM (2 children)
"Some portion of those shared passwords will not sign up, they will just stop watching netflix for free."
And what do you think is in it for Netflix to allow that?
It's not just about INCOME, it's also about EXPENSES. Supporting lots of extra users that *aren't* actually paying for the service is a profit-hit too.
Netflix don't care whether or not you would become a customer... that's old PirateBay thinking. They care that you are freeloading on a service they have to spend money to provide, and they see nothing for it beyond "brand recognition", which is like trying to pay for your coffee by telling the cafe that you're an "influencer" and will give them airtime.
And contrary to the old RIAA/MPAA situation, Netflix *are* spending money for every stream you press Play on. Licensing, delivery bandwidth, storage bandwidth, etc.
Even the title looks like it was written by a Slashdotter of old (which is ironic, because I am one). "Netflix’s *Unnecessary* Password Crackdown"?
If Microsoft started "cracking down" on people using Office unlicenced, would that be seen as "unnecessary"? And with MS their costs *are* sunk into Office development already and one extra freeloader costs them nothing. That's not true of Netflix.
I don't care about Netflix. I had a trial once, never bothered to use it again, probably wouldn't ever pay to subscribe to such a service... Amazon Prime is the closest I get and I barely use the streaming stuff and it has almost no part in my decision making (and even then, next renewal is going up, so I'll rethink if I even bother then).
But suggesting that they doing this to try to force those freeloaders on their own customer's accounts to pay money is ridiculous. They're doing it to stop their costs of delivery being 2, 3 or 4 times more than they should be given that the account only has one paying customer.
(Score: 2) by aafcac on Friday February 10, @05:25PM (1 child)
But, the service is already being paid for multiple screens. I'm some cases you don't even get the option of using for one screen only.
(Score: 2) by ledow on Friday February 10, @06:31PM
And there's only so many screens that a given amount of related people (e.g. a family) can use at one time from one location, or even on one wifi network.
Of course they're aggregating and expecting people to use their channels at times, but they're also stopping 1m "5 screen" users using 5m screens of bandwidth 24/7.