Netflix account sharing is price tagged now: Has it got all wrong?

Netflix account sharing is no more available for free. But the strategy of the OTT giant to charge an additional fee from users could backfire as many users may not be comfortable with an additional monthly fee, besides the complexity and new restrictions involved in the process.

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Netflix account sharing is not going to go away, albeit it’s going to be price tagged. After turning a blind eye for years, Netflix is looking serious to clamp down on sharing passwords. The OTT major is currently testing a new method in select few countries as a pilot project to evaluate the market response before extending it globally. The streaming service has now revealed how the whole method will work and help the company to tighten the noose around users sharing or sub-selling their accounts to friends or anyone.

The crackdown comes in the shape of a brand new feature that is known as “add an additional member” in certain countries, or “add an address” in others. This test is running for Chile, Costa Rica, and Peru beginning next month, it will be available for Argentina, Dominican Republic, El Salvador, and Honduras.

As per Netflix Inc. (NASDAQ:NFLX), the theory is that every account is tied to one house. Max of four members can access a Netflix account as far as they are staying in the same house without paying extra. However, if you would like to add another home, or want that a member staying in some other home should be able to share the same Netflix account, you’ll have to pay an additional fee of $3 per month. The idea here is to narrow the losses by generating revenue from freeloaders and add seize the decline in users since Netflix has just lost almost 1 million users.

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Netflix, however, is well known for squeezing as much as possible from every user and the new feature is no exception. You can add only one home with the Basic plan, max two homes with Standard, and three additional homes with the Premium plan. Each home addition comes at a cost of $3.

Netflix has also stated that users will be able to stream while traveling as far as they will use either a laptop or mobile phone. This is where the issues could be. How will Netflix differentiate between paying users traveling away from home and someone who is using legitimate account sharing, is anyone’s guess!

According to the Support page for their Honduras test (opens in a new tab), Netflix determines your home base using different pieces of information, including “IP addresses” as well as “device IDs” and the activity of your account. In the event that Netflix finds that you’re watching your TV far from your home, it will prompt you to pay $3 per month. If you don’t pay, or you’re genuinely away from your home due to an actual reason, two weeks is the time you get to access Netflix there.

Once the two weeks period ends, the access to Netflix on TV will be restricted until you either add an additional home or sign up for a separate personal account.

In case of permanent shifting, you can change your base home address through account settings.

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Netflix also affirms that a “home” is one physical place, however, it’s a simplified explanation if you ask us.

In a bid to crack down on Netflix’s account-sharing practice, the streaming giant has created a new challenge for families which is not nuclear. Children who share their time with parents. They’re still members of the families of their parents even in the absence of their parents throughout the 52 consecutive weeks.

All of it sounds very complicated, isn’t it?

Netflix account sharing: Netflix is screwing up

Despite price tagging the new feature in a bid to discourage account sharing practice, there are many questions that remain unanswered and need clarity on their functioning.

There are people who believe that Netflix is failing to find the path to clarity and simplicity, and the new feature appears to be the least effective when it comes to dealing with the challenge at hand – the decline in users.

The new feature will help the company to get more money out of existing users’ pockets, but won’t add new users to the platform. In fact, it may backfire as many users would find it annoying and end up canceling their existing subscription. For Netflix, which is already the most expensive streaming platform as compared with Disney+ or HBO, any attempt to push users hard by blocking their access in a bid to squeeze out additional recurring payments could be disastrous for Netflix. This has already happened during the beginning of testing for various reasons. It’s hard to imagine that anyone was pleased with the streaming service’s attempt to make more money to pay for something that it had previously pushed.

Already under pressure to seize the crash of stock price and declining users base, Netflix is trying hard to win back the confidence of wall street. Netflix’s stock price has crashed 66% from the beginning of the year. The streaming giant has already lost 200,000 and a whopping 1 million users in Q1 2022 and Q2 2022, respectively. Netflix, however, projects it as a sign of recovery as it expected to lose 2 million users in Q2 2022. Nonetheless, the loss of 1 million users itself is a cause of concern especially when the OTT market is slowly getting crowded due to the emergence of many regional and local players who are leaving no stone unturned and fast eating into the market of global OTT players, such as Netflix and Disney+.

Single user account: The ultimate strategy?

For a long, many experts & analysts have been advocating the idea of Netflix introducing multi-device single users account. This could be a far better strategy to put curb the practice of Netflix account sharing that over 100 million users are exercising, and are tagged as ‘free loaders’.

Instead of price tagging the feature which allows users to add a new home at $3 per month per house, Netflix must introduce a multi-device-type plan for every user. Currently, the Basic account of Netflix restricts users to stream content at a lower resolution which jeopardizes the watching experience on TV. With the increasing global penetration of SmartTV with more than 32″ resolution, 1080p must be the minimum resolution for a user. No users should be able to add more users to their account and the plans’ segregation must be sone based on resolution and number of device types allowed. However, instead of giving controls to users to add more users, a premium plan user should be allowed to add the device connected to the same network, and no two similar type devices, i.e. two TVs, must be allowed to stream content using the same password.

The above strategy will provide more cushion for Netflix to revisit its pricing strategy and introduce more pocket-friendly plans. Eventually, it will be more lucrative for a sizeable share of that 100 million freeloaders to buy a new subscription instead of indulging in account-sharing activities.

Not only this will help Netflix to generate more revenue but also to acquire more paid users officially.

The mighty has fallen, apparently. Netflix was once the undisputed leader of the global streaming industry. However, it appears that competition from all corners has increased and made the company react in the most obnoxious ways. Be it canceling shows without prior notice, avoiding binge releases in the worst possible manner, or making poor choices, all of it has only increased the challenges for Netflix and caused people to be annoyed.

The charging for account sharing is certainly one of the last, and the worst too, options since there’s nothing of value to the user. It’s likely that the decision will be restricted to a handful of Central as well as South American countries for the moment as Netflix can’t afford to jeopardize its expansion plans to Asian markets which are popular for their price sensitivity.

It would be interesting to see when and how many people will be making the fuss about the new feature, which will force Netflix to revisit its pricing strategy and reshuffle its plans once again.

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