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Netflix’s password-sharing crackdown — here's what the CEO has to say

Netflix
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Netflix has denied that it will attempt to put a stop to people sharing their accounts with friends and family. In its earnings call this week, the question was asked directly of CEO Reed Hastings, who explained that this wasn’t an attempt to “turn the screws” on customers who did share their accounts with others.

Hastings said, “we will test many things, but we would never roll something out that feels like turning the screws. It's got to feel like it makes sense to consumers.”

Netflix COO Greg Peters added, “First of all, we recognize that our members are in different positions, again, and they have different needs from us as an entertainment service. And we're really seeking that sort of flexible approach to make sure that we are providing the plans with the right features and the right price points to meet those broad set of needs.”

Peters added, “we also want to ensure that while we're doing that, that we're good at making sure that the people who are using a Netflix account, who are accessing it, are the ones that are authorized to do so.”

If Netflix’ goal was to prevent unauthorized account access then it might be worth them taking a look at how they worded the original message. It said “if you don’t live with the owner of the account, you need your own account to keep watching.” That’s absolutely not the sort of error message you’d expect for a user suspected of being unauthorized; it clearly says you’re not allowed to use accounts unless you live with the account holder. 

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So is it possible that Netflix saw the backlash on this, especially after raising prices and moving into profit, and decided to pull back on plans to shut down account sharing? Yes, it certainly is. Whatever the truth behind that move is, it’s clear customers feel that they’re paying for a number of concurrent streams, not simply for one household to use the service.  

Netflix was also asked to explain why its subscriber growth has slowed considerably this quarter. As expected, the pandemic is largely to blame. Adding 40 million users in 2020 was an anomaly as people sought something to do during lockdowns and their lunch hours while working from home. The company has 210 million subscribers now so it’s natural that there will be some slowing of growth. 

The company is certainly doing well, but it is faced with an uphill battle now. With a lot of people already subscribed the race to 500 million customers is likely to be a lot harder. Netflix also looks like a poor value when compared to services like Disney+, which costs $7.99 per month and also allows four simultaneous streams. Netflix is charging $17.99 for the same thing and won’t let subscribers access 4K content unless they pay top price. 

Customers have only a certain amount they’re prepared to spend on streaming and there are now several services — including Apple TV Plus, Peacock, Disney Plus, HBO Max, Paramount Plus and more — all vying for that monthly fee. The fight to open your wallet is heating up.  

A tech journalist with many years of experience, Ian got his start writing about the battle between HD DVD and Blu-ray. Technology might have moved on, but there's still plenty of skirmishes to report on.