Over 100 million people watch Netflix without paying. Legally. But the site has an ace up its sleeve

Netflix announced Wednesday morning that it lost 200,000 in the first quarter of 2022. users (while analysts expected an increase of 2.5 million). This – the first fall in the number of subscribers in a decade – is mainly the result of the platform’s withdrawal from Russia (loss of 700,000 people from that market), but also of growing competition and account sharing.

100 million people share Netflix accounts

Netflix’s policy has been clear over the years. The website allowed users to share logins and passwords to one account at no extra charge. When you purchase one of the two higher plans, Netflix allows you to watch different content on two or four devices simultaneously, which many people enjoy. Importantly, the regulations state that sharing an account is only possible within the same household.

For a long time, however, Netflix did not in any way verify that we were not “borrowing” an account from a neighbor or friend across town, and even silently allowed it. The effect was easy to predict. It is an open secret that today one account on the website is paid by two, three or four friends (who do not live together) sharing the cost of a rather expensive subscription.

Netflix is ​​aware of this himself and probably would like to curb the procedure, but he does not know how. Now the platform’s authorities have officially admitted that the scale of account sharing is gigantic. According to the company’s financial report, the accounts are already shared by over 100 million people. That’s almost half of the total of 221.6 million subscriptions currently active.

Netflix co-founder and CEO, Reed Hastings, that the platform has always had account-sharing users, but over the years of dynamic growth, this issue “has not been a high priority for her.” He also clearly made it clear that now is the time to put an end to the practice or somehow make money on people using someone else’s accounts.

At least 320 million people actually use Netflix

To obstruct or completely block this practice, purely theoretically, would mean an influx of tens or even millions of new subscribers for Netflix. If 100 million of active subscribers share their accounts, Netflix is ​​actually used by at least 320 million people, and in the extreme case (when four people use each of the 100 million shared accounts) even over half a billion viewers. But only over 220 million are paying for it.

Netflix is ​​well aware, however, that blocking the sharing of accounts may not only not bring new subscribers, but even cause their sudden outflow, because not everyone will be able to independently pay several dozen zlotys a month for access to the platform. No wonder then that Netflix is ​​looking to solve the problem like a dog for a hedgehog.

Netflix has a way (and even ways) to fight against account sharing

Netflix seems to have an ace up its sleeve though. Reed Hastings admitted that a company that would be cheaper than all currently available options, however, had to watch ads. He has not revealed the details yet, but admitted that the plan will not appear too soon, perhaps only in a year.

It could probably be a good alternative for people who start fleeing the service because of too high costs. For example, when Netflix actually decides to somehow curtail or restrict the sharing of accounts with others, making it more expensive to use than it is today. Especially since, as Greg Peters, Chief Operating Officer of Netflix has now admitted, a company from people who share accounts.

Such a fee already works in three countries – Chile, Costa Rica and Peru – where it is possible to add up to two people from outside your household to your account for a small fee (about PLN 12-13). So far, Netflix has not introduced a similar function in other markets, but the platform often tests new products in a few selected countries and then adds them in others.

Last year, Netflix, a system for verifying the accounts of people who share them with others. Before logging in, it was necessary to confirm access to the platform via the e-mail address or telephone number assigned to the account. Perhaps these three steps (new plan, sharing fees, and account verification) are Netflix’s new way to fight the millions of people who watch movies and series on someone else’s account.