Streaming Media

Netflix password-sharing changes could push other platforms to follow

Netflix still plans to change password-sharing rules after catching heat online, and its streaming competitors are taking notes.

Netflix password-sharing changes could push other platforms to follow

The streaming industry had a bad 2022 — with its slowdown of subscriptionssinking stock prices and a slew of layoffs and cancellations that drew the ire of fans.

All of that drama didn't stop with the new year, and all eyes are on the streaming leader Netflix as it attempts to crack down on password sharing.

"Part of it is just what we call casual sharing which is people could pay, but they don't need to, and so they're borrowing somebody's account," said Gregory K. Peters, Netflix co-CEO. "So our job is to give them a little bit of a nudge and to create features that make transitioning to their own account easy and simple."

Netflix is attempting to capitalize on a practice they arguably helped start: password sharing.

While the company walked back some of its plans to require users to connect to their account at home every month, Netflix is still pursuing a way to charge an extra $3 to $4 a month to the 100 million estimated users who piggyback off other accounts.

Person watching Netflix on tablet.

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A 2019 report from the research firm Parks Associates said streamers lost $9.1 billion to piracy and account-sharing, and by 2024, researchers estimated those losses could grow to $12.5 billion.

Analysts at Cowen Inc. estimate that by adding in that extra fee for account-sharing users in North America, Netflix could make an additional $721 million in revenue this year.

"I think it's worth noting that this will not be a universally popular move," Peters said. "We'll see a bit of a cancel reaction to that."

In other words, Netflix knows users are complaining about the changes, but that isn't going to stop the company from moving forward.

Other experts say the streamer is underestimating the number of subscription cancellations it could face. 

It's worth noting that Netflix faces the issues of recession worries as well as major competition from Amazon Prime Video, Disney+ and the soon-to-be merged HBO Max and Discovery. Each of those platforms have relatively lax rules on password sharing, but that could change as the industry reigns in content spending, raises prices on consumers and focuses on the bottom line.

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