If you’re using someone else’s Netflix account, this news is for you: Netflix wants to monetize sharing, and it wants to do it soon.
In a letter to shareholders as part of the first quarter earnings results, Netflix for the first time quantified the total number of households using another household’s account, saying, in essence, that more than 100 million households use currently Bridgerton using someone else’s credentials. and not paying Netflix for the service.
The company currently has more than 221 million paid subscribers worldwide, but that number is virtually unchanged from last quarter. According to Netflix’s tally, around 33% more people could also pay to watch the upcoming Squid Game.
It’s no secret that the popular streaming service now cares about people who share accounts. Earlier this year, it unveiled a pilot program in which it would add an additional $2.99 to accounts that want to share their credentials outside of the household. For now, the test is contained in Chile, Costa Rica and Peru.
However, based on the wording of the letter, it’s now clear that Netflix could move quickly to expand the program. In the letter, Netflix explains, “So while we can’t monetize everything at this time, we believe this is a great opportunity in the short to medium term. As we work to monetize sharing, ARM growth, revenue and viewing will become a more important indicator of our success than membership growth.”
Netflix’s growing pains are actually spread across a number of factors, which Netflix notes it cannot control, such as how many people are buying connected or smart TVs, who is switching (or not) from cable and stream to on-demand services (like Netflix) and rising data costs. It should be noted that Netflix, which does not control the cost of broadband data but manages its own service prices, has increased its prices in recent years, including a significant increase in January.
Despite the large number of people sharing Netflix (100 million worldwide and 30 million in the United States and Canada), Netflix notes that the number of sharers has remained relatively stable in recent years. Still, it makes Netflix no less keen on tapping into that potential revenue.
It’s also clear that as the world comes to life outside of our COVID bubbles, Netflix has seen some kind of abrupt growth and decline. It was fast in 2020 but pulled back significantly in 2021 and the downturn has only accelerated due to factors that Netflix cannot control and those tens of millions of unpaid account sharers.
What does this mean for you?
If you’re one of the millions of people who share the accounts of your parents, maybe a friend or distant relatives, Netflix warns you. There probably won’t be a global surcharge for account sharing today, tomorrow, or next week, but it sure does. One day you might get a call from a friend, “Hey, about my Netflix account…”
- If you want to understand why Netflix’s decisions are just the start of a slippery slope to account sharing, read this.