“Sharing is caring” you heard it right, but not in the case of Netflix. Netflix has announced that it is now not compromising on password sharing as it has lost a huge number of subscribers for the very first time in a decade. If this practice continues, then it would lead to a global crackdown that would leave Netflix in losses. When the number of paid subscribers does not match the average number of views then that means there’s a major halt in the system. Moreover, it will also be very difficult for Netflix to allow password sharing now due to its competitors including Amazon, Hulu, Disney Prime+, and others. For this reason, Netflix has decided to charge a password-sharing fee as well to increase revenues and curb the losses.
“If the schemes to counter password sharing move too fast and too aggressively, it also risks alienating a potential future audience – many who password-share beyond the household are not actually aware they’re breaking the terms of their subscription”, said Dominic Sunnebo, an analyst at a research firm. “The main approach we have is asking our users to pay a little bit extra to share the service outside of their homes,” said Netflix’s chief product officer, Greg Peters. The main challenge for Netflix is its competitors like Amazon whose revenues are constantly up roaring and Netflix can’t afford to lose its revenues at this point in time. Therefore, despite increasing the subscription charges, which was also an alternate option, Netflix considered it better to charge a password-sharing fee to its users.
Interestingly, Hastings said in 2016; “Password sharing is something you have to learn to live with because there is so much genuine password sharing, like you sharing with your spouse, with your children…so there is no clear line, and we’re ok with this.” But now the times have changed and Netflix is planning to do the opposite of what has been said because the main aim of any business is to generate revenues and no business can compromise on this factor. Loosing 200,000 paid subscribers and more than 100 million homes utilizing the shared password is a very daunting situation for Netflix that’s why it has decided to take this step finally.