Netflix’s Planned Crackdown on Password Sharing is a Bad Idea
July 22, 2022
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by Stephen Kanyi

Netflix is doubling down its efforts in cracking down on password sharing. In a bid to improve its financial fortunes in the face of sliding subscriber numbers the streaming giant is planning to charge customers in several Latin American markets extra if they add additional homes to their Netflix accounts.

According to a recent blog post, a traditional subscription will grant viewers the ability to use a single Netflix account in one home and pay an additional $2.99 for each new home added. These changes will apply to viewers in El Salvador, Honduras, Dominican Republic and Guatemala. In Argentina, the cost will be 219 pesos per additional home.

Also, to be included in this new piloted system is a ‘travel’ mode where users can use smartphones, tablets and laptops to stream content while away from home. However, when questioned about the logistics of watching from say, a TV set at a hotel, Airbnb or vacation home, a Netflix spokesperson responded: “When people watch Netflix on a TV outside their home, they will have to purchase that location as an additional home.”

This move is an obvious response to dwindling subscription numbers over recent months. The streaming giant lost 200,000 subscribers in the first quarter of this year and predicted a further 2 million subscription loss the following quarter.

It is however unclear whether password sharing will help return viewers to Netflix. The company has identified it as one of the top reasons for its poor performance but hasn’t shown enough to prove this. Moreover, password sharing is not unique to Netflix alone. Other streaming platforms allow viewers to share passwords but have not made any intentions to stop it.

Seems to me that Netflix is trying to circumvent what is arguably its biggest flaw. It is one of the most expensive platforms in the market. This factor alone is driving away viewers in mass especially as more regional-focused alternatives come up almost every month. Increasing the price will only drive more of its viewers to competitor platforms.

Moreover, the price hike has not necessarily come with an increase in content quality. It is not a secret that Netflix has been suffering a serious dip in quality in recent months. This year for instance, there have only been two significant hit shows; Stranger Things Season 4 and Squid Game.

And yet, prices will go up. Depending on the results of the pilot scheme in Latin America the company plans to implement plans to curb password sharing throughout the globe. I foresee a significant drop in subscribers if the company proceeds with these plans. Most viewers especially in developing nations (who make up a majority of the globe) are not willing to part with more than $20 for a single subscription that cannot be shared.

The smart thing would be to reduce the number of users allowed to access a single account to say two. That way they would be able to keep prices down. Most importantly, however, Netflix simply has to improve the quality of content on its platform. More personalized curated content catering for every possible like is the way to go.

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