Netflix Expands Its Stupid Password Sharing Crackdown Cash Grab
We've noted how, as Netflix gets bigger and more powerful, it has increasingly behaved more like the cable giants (Comcast) it used to disrupt. For example, once it was big enough to pay telecom giants their pound of flesh, it stopped caring about stuff like net neutrality.
But there's no better example of Netflix's pivot than the company's dumb password sharing crackdown, which will require users to pay an extra fee if they're caught sharing their password with people who live outside of the home of the original account holder.
It's dumb for several reasons. One, predictions of how much money Netflix will make from the crackdown (Adobe claims $9 billion annually, for example) aren't based in reality. Two, Netflix already limits the number of simultaneous streams per account, forcing you to pay more if you want more. In other words, the problem" Netflix is trying to monetize has already been monetized.
Three, users just faced major price hikes. Four, Netflix is losing subscribers due to increased competition, and providing users with new, annoying reasons to leave your service isn't particularly bright. Five, Netflix is on record repeatedly saying password sharing was no big deal and it loved the practice, which it saw as little more than free advertising not that long ago:
Love is sharing a password.
- Netflix (@netflix) March 10, 2017
The crackdown hasn't yet come to the U.S., but probably will next year. In the interim, Netflix has been using cash-strapped South American Netflix users as messaging guinea pigs, as it tries to figure out messaging that justifies the cash grab. It's... not working particularly well:
The announcement of this latest pricing experiment triggered a wave of criticism, most notably among users in Argentina - the fourth-largest household penetration rate for Netflix globally, according to Comparitech, a consumer tech research platform, behind only the U.S., Canada, and Australia, with more than 4.5 million subscribers as of 2020. Argentine users took to the internet more vociferously than any other country, as anti-Netflix memes, hashtags, and posts went viral across social media. Many threatened to leave Netflix en masse by popularizing the hashtag #ChauNetflix (#ByeNetflix), a riff on the platform's local #CheNetflix promotional campaign on Twitter.
Wall Street, as it does, demands quarter over quarter growth at any cost. Netflix clearly doesn't feel like it can achieve that growth through improved service or innovation, so it's taking a page from the cable industry playbook and attempting to do it by firing people and nickel-and-diming existing subscribers. It also joined the MPA, and embraced the dumb cable industry belief that password sharing is piracy."
But unlike Comcast in its heyday, Netflix actually sees meaningful, unconstrained competition. Disney, Amazon, Starz, Apple, Hulu, Paramount, HBO and the countless other streaming competitors that have been nibbling away at Netflix subscriber counts all surely appreciate Netflix's dedication to making its service more expensive, cumbersome, and annoying.