Netflix recently said that they know certain users are sharing passwords, and they’re “monitoring” the situation. They also said they’re looking into “consumer-friendly ways” of preventing you from doing it.
But no imminent changes are in the pipeline . . . despite the fact that it’s costing them a FORTUNE.
A recent study by an analytics firm estimated that 35% of millennials, 19% of Generation X subscribers, and 13% of Baby Boomers share their passwords for streaming services.
Even if 10% of Netflix’s 137 million customers are sharing their passwords with a non-paying customer, that means 13.7 million people aren’t paying.
If they were, Netflix would be raking in somewhere around $135 million more monthly, or $1.6 billion annually.
Price-wise, that’s a conservative number, since this presumes the cost-per-user would be $10, and Netflix’s most popular plan is $12.99. THAT’S the one that allows two simultaneous streams and makes sharing possible.
The cheap plan is just one screen at a time. And there’s also a $15.99 plan that allows four screens at once.
But there’s a bigger problem with this data: It assumes that EVERYONE who’s using someone else’s password would sign up if they couldn’t share. And that’s a big leap. Chances are, only a fraction would pay for their own account.
Three years ago, Netflix CEO Reed Hastings said, quote, “Password sharing is something you have to learn to live with, because there’s so much legitimate password sharing . . . sharing with your spouse, with your kids . . . so there’s no bright line, and we’re doing fine as is.”
And yesterday, Hastings said that subscriber numbers don’t matter as much anymore, because new services can be made available in bundles with other products. The REAL streaming war is over EYEBALLS.
He said, quote, “Time will be the real competition . . . how do consumers vote with their evenings? What mix of all the services do they end up watching?”
(Market Realist / BroBible / Magrid / CNBC)