Netflix has launched the first significant counteroffensive move in dealing with the $6.25 billion the firm has been losing annually. They attribute the loss to members within the platform sharing their sign-in information. For Netflix, this is their most compelling financial loss dating back to long before the existence of other competitive streaming services. Therefore, the firm has decided to try putting a stop to the cross-sharing going on under their domain.
Business Insider maps out the memberships under Netflix. $9.99/month pays for a Basic Plan, $15.99/month for their Standard Plan, and $19.99/month for a Premium subscription.
“Depending on the Netflix plan you choose, you can gain access to streaming on multiple screens at once,” Business Insider explains. So, if you decide against paying for the top-tier plans, you will no longer be able to share your sign-in with other people because the platform will cap the number of devices you can stream on based on the plan you pay for.
This is controversial. Customers have argued price-hikes in the past, so naturally customers of the nearly three-decade-old streaming service are not happy now. The latest move by the streaming company has some customers debating if they should pull the plug on the company altogether.
When Netflix started in 1997, there was no competition as it was one of the first remote-entertainment services of its time. Then, they only competed with Blockbuster and libraries. According to Product Habits, the company started with a collection of only 900 titles which they charged customers a whopping $0.50 per title rented from the platform.
Nearly thirty years ago, the rates of inflation and demand were quite different from what we know today. While the multi-billion dollar company is profiting by keeping up with the times, customers are asking if the new plan rates are fair, or even worth it. Some of Netflix’s loyal customers no longer think so.
For nearly a decade, according to Wired and NPR, Netflix has been trying to crack down on password sharing. In 2011, the company launched its first campaign to combat the issue. In recent weeks, a letter written to address the company’s shareholders explained “the streaming giant said it had a net loss of about 200,000 subscribers this quarter, from 221,840,000 down to 221,640,000. And Netflix is projecting that those numbers will keep sliding down to roughly 219,640,000 people in the second quarter of 2022. The company estimates that there are more than 100 million additional households, including more than 30 million in the US and Canada, mooching off of paid accounts,” quoted from Wired.
Wired suggests an alternative to Netflix’s rather brash move; track devices on an account and limit the number allowed on each subscription level. As opposed to snubbing long-term customers. They describe Netflix's most recent proposal as somewhat elitist as it will completely block people paying for the Basic Plan from sharing with anyone. The alternative Wired proposes would be fair to people who have been continually paying for Netflix services for decades.
Contrary to listening to their customers’ concerns, Netflix went ahead and tested out their latest plan in Chile, Costa Rica, and Peru, as reported by Complex. They began charging primary account holders an additional $2.99/month for sharing their passwords with anyone living outside the home. While this plan is still very much in the trial phase, something is coming to fruition.
While some support getting rid of moochers and free-loaders, others have had quite enough of Netflix’s price hikes. This $2.99 hike may be the final straw for some of Netflix’s customers; customers Netflix is already worried about losing.
The reality is: the streaming giant will be bringing on a change, even if this game-changing move will have the most negative impact on Netflix. Today there is Disney+, Hulu, HBO, Apple TV, Prime Video, Paramount+, Noggin, Tubi, Roku, and others; Netflix won't stand a chance anymore. People today have options that they didn't have twenty years ago. Netflix is toying with a dangerous idea, one that could potentially crumble the multi-billion dollar company. Is this new idea worth it or will a better idea be proposed?
Fortunately, most people have a backup plan (any other streaming services previously mentioned.) Should Netflix follow through on this, anyone unwilling to pay the upcharge is ready to leave the streaming service in the dust.