The end is near for password sharing on Netflix

Account sharing seems to be a major issue for Netflix, but will this gamble backfire dramatically?

We've seen plenty of major moves from Netflix recently as the streaming giant tries to post better numbers from a disastrous showing earlier this year. The first step was introducing an ad-incentivized cheaper tier of subscription was the first step. Now, Netflix is cracking down on account sharing.

cirila withcer netflix
People might need to abandon the story of The Witcher and other Netflix originals if prices keep rising

A recent report by the WSJ claims Netflix researchers have been campaigning about this for a while, claiming that password sharing is eating into the platform's subscription numbers. 

“Make no mistake, I don’t think consumers are going to love it right out of the gate,” Netflix Co-CEO Ted Sarandos told investors earlier this month. And that’s the risk this huge gamble brings, as the public’s opinion of Netflix has significantly worsened after record interest during the pandemic.

Outside analysts seem to add up to Netflix’s claims, with one study showing the company is going to rack up more than $720 million in additional revenue if it shuts down password-sharing right now. Their findings are based on surveys in which the majority of customers said they’d pay additional fees to keep their family members signed in if Netflix was to go ahead and institute that policy.

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Vikings: Valhalla chronicles the heroic adventures of some of the most famous Vikings who ever lived

As tempting as the numbers might look to investors, they could also backfire. Netflix’s plans are already the most expensive ones of all streaming platforms on the market. Adding fees is not going to help at all. After all, if making Netflix cheaper didn't work, the opposite is far from a good idea.

We’re at a point where subscription-based models have taken over multiple industries, and with multiple streaming platforms offering exclusive content, it feels like we’re paying cable. The financial burden this can put on a household in this economic environment makes it easy to imagine a large number of consumers dropping Netflix entirely.

Netflix is testing this proposed system in South America and the result is as expected. All of the consumers are complaining about the added expense. A common issue is implementing a system that can keep track of members of the same household where one or two travel a lot. Whether ‌it's traveling to another country, logging into a different device, or simply kids sharing time between the two homes of separated parents, Netflix has a long way to go before this system is properly regulated.

There’s still no price determined for the additional fee people will have to pay. The new ad-supported subscription tier Netflix introduced recently costs $7 and according to reports, Netflix executives think that the new fee should be close to that. With their end goal being to drive up subscriber counts which have fallen off during the early portions of 2022, this venture could go in either direction. Either way, we are treading dangerous waters. If this feature is accepted by consumers and Netflix sets a new precedent with skyrocketing prices, what's stopping Hulu, HBO, Disney, and Amazon from following suit? If not, Netflix could further magnify its 2022 losses with a massive exodus in the first quarter of 2023, making the road to 2020 form even steeper.

If it's any consolation, Netflix has the next seasons of You and The Witcher, among others, going for it next year. Fingers crossed, the popularity of its shows could help the streamer prevent a further slide.

Scott Kostov

A passion for writing and gaming has propelled Scott down the path of content creation. When he isn't scouring every known source on the internet for information, he's a track addict vibing to music in the countryside of sunny Macedonia. Link up with Scott on Twitter and Steam.
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