Netflixthe giant that innovated the streaming industry, is facing for the first time in a decade a massive loss of revenue and subscribers. Although users believe that this is due to the emergence of new competing streaming platforms, such as HBO Max and Disney Plus, the company has attributed its loss to shared accounts.
The site currently has 222 million accounts subscribed to its services but, More than 100 million users access Netflix with a shared passwordassures the company.
“Accounts are shared between different households, which affects our ability to invest in new TV shows and movies for our members,” said Chengyi Long, Netflix’s director of product innovation.
Netflix has initiated a strategy in select countries to end account sharing. In Chile, Costa Rica and Peru, the platform began charging for profiles that log in outside of the main household, through the option “add additional members”.
The additional cost for account holders adding up to two additional users was PEN S/. 7.9 for Peru, USD $2.99 for Costa Rica and CLP 2,380 for Chile, according to Variety.
Regarding account sharing, Greg Peters, COO, explained that they are not “trying to shut down that exchange, but we are going to ask you to pay a little more to be able to share (the password) and to get the benefit and value of the exchange. service, but we also get the revenue associated with that view”.
Although Netflix has already begun to implement its charging plan for additional profiles as a pilot plan, there is still no set date for its full implementation.
“We’re trying to find a balanced approach,” says Greg Peters. “To set your expectations, I think we’re going to spend a year or so iterating and then implementing all of that so we can launch that solution globally, including markets like the United States.”
“As we work to monetize the exchange, average membership revenue growth, revenue, and viewing will become more important indicators of our success than membership growth,” he adds.
Netflix has not yet addressed what would happen if the incumbents refuse to pay the value for the extra users, or what they would do with the 80% of US users who refuse to create an account in case of losing your shared password, percentage obtained in a Time2Play survey. (I)