Netflix Password Sharing Crackdown to Expand to U.S. in Q2 2023

[OhMyMy]

I miss those early days when Netflix released like one Original per month (if that) but then you knew it would be of quality with many seasons to come. Now they throw out so much to see if it sticks. Many shows I don’t even hear about until the cancellation news. What made Netflix so great (compared to prime time tv) was that I did not have to worry about a show I was watching being cancelled. They completely destroyed that value preposition. Now it’s actually worse than prime time tv, at least there you get weekly ratings to see how the show you are watching is doing and you can sort of expect a cancellation coming or not early on

They lost Friends, Daredevil and a lot of other shows I used to binge. Now I’d rather rewatch Dateline than take a chance with their originals. ATV+ has much better quality originals than anyone else right now and I don’t regret paying for Apple One one bit.
Hopefully they focus on licensing content and not get carried away by the success of their originals.

 

[OhMyMy]

I’m here just for the comments to see how people justify stealing

You’re a funny dude.
It’s $20 for 4 streams so how is it stealing when they don’t allow more than that? You should understand the diff between going against T&C and stealing. The only stealer is Netflix charging twice that off most streaming services while providing poor quality content.

 

[macsplusmacs]

Maybe it’s time to upgrade to a Roku?

Goodness no.

Why would I want to downgrade like that?

 

[OhMyMy]

Tip for those interested in bypassing the BS. Set up your own VPN with a Raspberry Pi and a Tailscale server and problem (presumably) solved for basically nothing. You gotta pay for a Raspberry Pi, but the Tailscale VPN service is $0 per month. Linus Tech Tips recently did a decent video on it. Takes like 15 minutes to set up. VPN works great for me, but can't test the Netflix stuff yet because I'm in the US where there's currently no restrictions.

Other alternative would be WireGuard. It’s free and lightweight.

 

[mtulman1]

I am trying to understand like I am 5 years old. I use my sisters password who happens to live 10 houses away. So I assume I can bring my iPad and my Roku ultra there and log in on her WiFi. Great! I think.

 

[munpip214]

You can only add 2 additional profiles add ons. So if you had 4 streams and shared with 3 others, one of them is out of luck or you have to split 4 into two and pay full amount twice (this is assuming $6 add-on)
4 4K stream now $20/4=$5 per person
4 4K streams later $52/4=$13 per person

 

[AManInACan]

Ok so my wife has an office in our town about 10 mins from our house. We have Netflix on several Apple TVs at home, and she has an Apple TV in her office where she occasionally watches Netflix between clients (and sometimes the kids hang out there after school if she’s there later than school). Can we still do this going forward? Would we have to bring the office Apple TV home once a month to authenticate at our home (which we would designate as our main location)? Or do I have to set up a vpn connection and route the Netflix traffic from the office to our home?

This will probably covered with the provisions for people and their second houses. As long as she has Netflix on her phone and starts it at her office once/month then it should keep running.

 

[aParkerMusic]

I’m here just for the comments to see how people justify stealing

Paying for two simultaneous streams that are only used by two people isn’t stealing. What sense does it make for one person to pay for two simultaneous streams? Your comment is intentionally inflammatory, and ignorant of the circumstances which aren’t one-person-sharing-with-some-ridiculous-number-of-people.

 

[aParkerMusic]

If I'm paying for the 4 screen service, it shouldn't matter where those 4 screens are, especially if it's all family.

Thank you! These Netflix-apologists always ignore this reality. It’s completely fair.

Let’s say there’s an account that a kid uses just for themselves, their parents are divorced and live apart and the kid goes between the houses. If the kid watches at both houses, this is “stealing” according to the rude and smug apologists. I don’t understand why they are being so intentionally and unfairly insulting. It’s not all “oh I’m gonna share with 25 of my friends”.

 

[jwdsail]

Netflix is planning a "broad rollout" of the password sharing crackdown that it began implementing in 2022, the company said today in its Q1 2023 earnings report [PDF].

The "paid sharing" plan that Netflix has been testing in a limited number of countries will expand to additional countries in the second quarter, including the United States. Netflix said that it was "pleased with the results" of the password sharing restrictions that it implemented in Canada, New Zealand, Spain, and Portugal earlier this year.

Netflix initially planned to start eliminating password sharing in the United States in the first quarter of the year, but the company said that it had learned from its tests and "found opportunities to improve the experience for members." There is a "cancel reaction" expected in each market where paid sharing is implemented, but increased revenue comes later as borrowers activate their own Netflix accounts and existing members add "extra member" accounts.

In Canada, paid sharing resulted in a larger Netflix membership base and an acceleration in revenue growth, which has given Netflix the confidence to expand it to the United States.

When Netflix brings its paid sharing rules to the United States, multi-household account use will no longer be permitted. Netflix subscribers who share an account with those who do not live with them will need to pay for an additional member. In Canada, Netflix charges $7.99 CAD for an extra member, which is around $6.

Prices are per person, and up to two additional people can be added to an existing Netflix Standard or Premium plan. The extra price provides each person with a profile, personalized recommendations, login, and password. Alternatively, people who share a Netflix account with someone outside of their household at the current time can initiate a profile transfer process that will allow the person who has free access to the account to make their own separate, paid account.

Netflix users will need to establish a primary location, and subscribers who are not at this location will not be able to use the service through that account. There are allowances for travel or second homes, with Netflix requiring users to open the Netflix app at the primary location once per month.

Netflix claims that more than 100 million households are sharing accounts, which is impacting its ability to "invest in and improve Netflix" for paying members.

Article Link: Netflix Password Sharing Crackdown to Expand to U.S. in Q2 2023

Seems like Netflix really wants me to cancel my service?

99% of my/my in-home family usage is when I’m traveling?

I’ve kept it because for the most part, up until now, it was the easiest service to just get my travel AppleTV connected to the internet and hdmi on the hotel tv and watch…

As soon as it’s a hassle to use while on the road, canceled. Unpack my gear bag at least once a month or it won’t work on the road? Canceled. Doesn’t work right for someone at home who doesn’t want to watch anything we’ll watch together when I get home and just wants to rewatch a familiar movie on Netflix? Canceled.

I’ll watch MST3K or Classic Doctor Who on PlutoTV instead.

SMFH

 

[usmaak]

I wonder how this will affect the ”free” Netflix I get through T-Mobile.

 

[Realityck]

I wonder how this will affect the ”free” Netflix I get through T-Mobile.

It doesn't, that a perk you have through T-Mobile , it goes up one tier if you have 2 phone subscription versus 1 phone subscription.

 

[Killerbob]

Excellent news... Not a particularly popular opinion, but it's mine, and I am sticking to it...

 

[Realityck]

Seems like Netflix really wants me to cancel my service?

I have to laugh at all the moaning and groaning, most people that comment in a Netflix thread are no longer using it in the first place. Even if you have their $20 service you can stop or restart it as needed. Max will soon a $20 a month service. Either has a lot more content then what people pay for through satellite or cable hosts and those robber/barons charge way more then pitiful $20 that streaming hosts cost per month. It's still the way most want streaming to be they get to pick different commercial hosts and watch what they want.

 

[Verified Whiskey]

Netflix goes bankrupt in 3…2…1…

 

[tranceking26]

This'll be an important move for netflix, let's see how they get on in the US with these new rules.

 

[sw1tcher]

One thing I can guarantee Netflix is that my brother and I will cancel our plan, and every single one of our friends are planning on doing the same if they implement this. Netflix sucks anyway, so no love lost. This will come back to bite them in the a** I promise you!

Why are you, your brother, and friends all paying for a service that you all don't like/are unhappy with (i.e. that sucks)?

Totally baffling.

 

[Applefan4]

Netflix is and always been garbage anyway, so no big loss there. Disney+ is much better and has better/more recent movies.

 

[frownface]

Netflix reported in the same earnings report that since they banned password sharing in Canada, they have actually added subscribers and the growth rate is now higher there than in the US. They report some initial cancellations as expected but signups by those who were freeloading more than made up for it.

I'd expect the same to happen in the US despite the vocal minority.

Exactly this.

People need to vote with their wallets.

Netflix would pull the plug on this idea if they saw a sharp revenue decline in the regions they tested in. Instead people voted with their wallets and netflix made more money. Now they're emboldened to roll it out to other regions.

 

[sw1tcher]

Provide a reputable source please.

Their shareholder letter which you can get from here: https://ir.netflix.net/investor-new...-Quarter-2023-Earnings-Interview/default.aspx

Last paragraph of page 2 and into page 3 reads (emphasis mine)

We’re on track to meet our full year 2023 financial objectives. For Q2’23, we forecast revenue of $8.2B, up 3% year over year, or 6% growth on an F/X neutral basis. We’re pleased with the most recent launches of paid sharing, and while we could have launched broadly in Q1, we found opportunities to improve the experience for members. We learn more with each rollout and we’ve incorporated the latest learnings, which we think will lead to even better results. To implement these changes, we shifted out the timing of the broad launch from late Q1 to Q2. While this means that some of the expected membership growth and revenue benefit will fall in Q3 rather than Q2, we believe this will result in a better outcome for both our members and our business (more details in the Monetization and Revenue section).

[ . . . ]

We expect constant currency revenue growth to accelerate over the course of the second half of 2023 as we continue to improve our service, more broadly roll out paid sharing in Q2 and grow our advertising business.




When you jump to the Monetization and Revenue section on page 5, the past paragraph reads


Paid sharing is another important initiative as widespread account sharing (100M+ households) undermines our ability to invest in and improve Netflix for our paying members, as well as build our business. We’re pleased with the results of our Q1 launches in Canada, New Zealand, Spain and Portugal, strengthening our confidence that we have the right approach. As with Latin America, we see a cancel reaction in each market when we announce the news, which impacts near term member growth. But as borrowers start to activate their own accounts and existing members add “extra member” accounts, we see increased acquisition and revenue. For example, in Canada, which we believe is a reliable predictor for the US, our paid membership base is now larger than prior to the launch of paid sharing and revenue growth has accelerated and is now growing faster than in the US.

[ . . . ]

As a reminder, as we roll out paid sharing – and as some borrowers stop watching either because they don’t convert to extra members or full paying accounts – near term engagement, as measured by third parties like Nielsen, will likely shrink modestly. However, we believe the pattern will be similar to what we’ve seen in Latin America, with engagement growth resuming over time as we continue to improve our programming and borrowers sign-up for their own accounts.

 

[sw1tcher]

Interestingly, their Basic with ads ($6.99/mo) plan is doing really well and, as I suggested would happen, is bringing in more money than their Standard ($15.49/mo) no ads plan

From same shareholder letter, page 5:

In the US for instance, our ads plan already has a total ARM* (subscription + ads) greater than our standard plan. So this month we’ll upgrade the feature set of our ads plan to include 1080p versus 720p video quality and two concurrent streams in all 12 ads markets – starting with Canada and Spain today. We believe these enhancements will make our offering even more attractive to a broader set of consumers and further strengthen engagement for existing and new subscribers to the ads plan.


*ARM = Average Revenue per paid Member

 

[MacWiz_007]

Their shareholder letter which you can get from here: https://ir.netflix.net/investor-new...-Quarter-2023-Earnings-Interview/default.aspx

Last paragraph of page 2 and into page 3 reads (emphasis mine)

We’re on track to meet our full year 2023 financial objectives. For Q2’23, we forecast revenue of $8.2B, up 3% year over year, or 6% growth on an F/X neutral basis. We’re pleased with the most recent launches of paid sharing, and while we could have launched broadly in Q1, we found opportunities to improve the experience for members. We learn more with each rollout and we’ve incorporated the latest learnings, which we think will lead to even better results. To implement these changes, we shifted out the timing of the broad launch from late Q1 to Q2. While this means that some of the expected membership growth and revenue benefit will fall in Q3 rather than Q2, we believe this will result in a better outcome for both our members and our business (more details in the Monetization and Revenue section).

[ . . . ]

We expect constant currency revenue growth to accelerate over the course of the second half of 2023 as we continue to improve our service, more broadly roll out paid sharing in Q2 and grow our advertising business.




When you jump to the Monetization and Revenue section on page 5, the past paragraph reads


Paid sharing is another important initiative as widespread account sharing (100M+ households) undermines our ability to invest in and improve Netflix for our paying members, as well as build our business. We’re pleased with the results of our Q1 launches in Canada, New Zealand, Spain and Portugal, strengthening our confidence that we have the right approach. As with Latin America, we see a cancel reaction in each market when we announce the news, which impacts near term member growth. But as borrowers start to activate their own accounts and existing members add “extra member” accounts, we see increased acquisition and revenue. For example, in Canada, which we believe is a reliable predictor for the US, our paid membership base is now larger than prior to the launch of paid sharing and revenue growth has accelerated and is now growing faster than in the US.

[ . . . ]

As a reminder, as we roll out paid sharing – and as some borrowers stop watching either because they don’t convert to extra members or full paying accounts – near term engagement, as measured by third parties like Nielsen, will likely shrink modestly. However, we believe the pattern will be similar to what we’ve seen in Latin America, with engagement growth resuming over time as we continue to improve our programming and borrowers sign-up for their own accounts.

Thank you. I still think this is smoke and mirrors from a dying company.

 

[MacWiz_007]

Why are you, your brother, and friends all paying for a service that you all don't like/are unhappy with (i.e. that sucks)?

Totally baffling.

When you split the cost, it's worth it. Full price, I think not. Simple really.

 

[sw1tcher]

Thank you. I still think this is smoke and mirrors from a dying company.

Dying company?

They're #1 when it comes to subscribers and revenue. And they're (I believe) the only profitable streaming service. Everyone else (Disney+, Paramount+, Peacock, Apple TV+, etc) are losing money.

Ranking the Winners in the Streaming Wars, by Revenue and Subscribers

IndieWire ranks the major streaming services by revenue. We've also got subscriber counts for Netflix, Disney+, Paramount+, and the others.

www.indiewire.com

Even Warner Brothers Discovery which owns HBO recently reported a huge loss... though they're getting smaller.

Warner Bros. Discovery Posts $217M Streaming Loss, Hits 96M Subscribers

The company disclosed earnings of $11 billion and a loss of $2.1 billion. The large loss was mostly due to continued restructuring charges and writedowns tied to the merger.

www.hollywoodreporter.com

Warner Bros. Discovery reported 96.1 million streaming subscribers in its latest quarterly earnings report, up from 94.9 million last quarter. And while it still posted streaming losses (the division lost $217 million), its losses in the direct-to-consumer segment were cut by nearly 2/3 compared to its fiscal Q3 last quarter, when it lost more than $600 million in the segment.

 

[MacWiz_007]

Dying company?

They're #1 when it comes to subscribers and revenue. And they're the only profitable streaming service.

Ranking the Winners in the Streaming Wars, by Revenue and Subscribers

IndieWire ranks the major streaming services by revenue. We've also got subscriber counts for Netflix, Disney+, Paramount+, and the others.

www.indiewire.com

You do realize that they are losing subscribers across the board at a rapid pace, don't you? They've somewhat slowed the bleeding but losing customers they are, hence the use of the word dying. I never said it would be a quick death.