Netflix password crackdown could be “a net positive in the long run” – Deadline

One analyst claims Netflix’s move to improve police password sharing could benefit the streamer in the long run.

Netflix messaged some accounts with multiple users this week, threatening them to shut down service if they share passwords illegally, but offering the incentive for a 30-day free trial in some territories. The message read: “If you don’t live with the owner of this account, you need your own account to continue watching.”

Netflix said the move was “designed to ensure that people using Netflix accounts are allowed to do so.”

Research firm Magid claims that 33% of Netflix users share their password with at least one other person. This has led one analyst to applaud the attempt to interrupt freelancers while avoiding the negative fallout from such actions during a pandemic that has left many people stranded at home and unemployed.

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“It’s pretty hard to estimate the impact that would have, but I think it would be a net positive in the long run because I think the number of password sharers right now is a pretty significant number,” said CFRA analyst Tuna Amobi. Yahoo! Finance.

“There would be an immediate negative impact in terms of churn rates. But it’s very easy to see how some of that impact would cancel out in terms of potential absorption by some affected customers, ”he said.

Amobi suggested the crackdown was a test of loyalty that could prompt those who receive the service for free to subscribe themselves.

Netflix is ​​far from needy. The company’s turnover in the fourth quarter of 2020 totaled over US $ 6.64 billion, up from just over $ 1.18 billion in the corresponding quarter of 2019. Netflix estimates that it will spend $ 19 billion on content this year.

However, research firm Parks Associates, in a report earlier this year, put the overall loss of password sharing streaming services at $ 9.1 billion, predicting that figure to rise to 12.5 billion. billion dollars by 2024.

“It comes with some risk, but I think it wouldn’t be drastically different from what some of the other service providers are already doing right now,” Amobi added. He warned that “family users” should be treated gently, but added, “I hope they can find something to track real abusers, but it’s not rocket science. There has always been a solution to this, but I was surprised it took them so long to get there… I thought it was late.

The number of accounts capable of broadcasting simultaneously is taken into account in the price of subscriptions. The basic $ 9 plan allows a single device to stream, while the standard plan at $ 14 double and the Premium level expands it to four devices. Netflix’s Terms of Service state that a subscription is “for your personal, non-commercial use only and may not be shared with anyone outside of your household.”