Photo Courtesy of Netflix / Facebook
In January, Netflix announced that they would crack down on password sharing this spring to transform borrowers into account owners. Yahoo Finance Live anchors believe this move could decrease their amount of users.
Andrew Uerkwitz, managing director at Jefferies, surveyed current Netflix users and discovered that “62% of [users] say they will stop using Netflix once that password sharing ends,” anchor Brian Sozzi said.
Sozzi continued, “That’s…a major red flag. Now, of course, you never know what consumers will do. Maybe they are, in fact, hooked on Netflix, and maybe that is a lower percentage. Who knows. But still, that is a jarring number there that does not suggest good things ahead for Netflix.”
Instead of completely removing password sharing, the streaming service offers users the option to pay for sub-accounts, around $3 to $4.
“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’s COO and Chief Product Officer Gregory K. Peters said. “So, we have this basically a profile export feature, which allows you to take your viewing history and all the great recommendations with you.”
Peters noted that their move “will not be a universally popular move” and that current members won’t be happy to where the company will “see a bit of a cancel reaction.”
“What happen if both from the specific change that we make, we’ll see folks come on as new subscribers, essentially borrowers creating their accounts or incremental monetization through the extra member that will happen shortly thereafter,” Peters said.
He continued, “…our job is to continue to grow value…to have more amazing titles that people cannot wait to see and whether that’ satisfying those members to make those transition or winning back essentially folks who have turned off the service and bringing them back on the service over the months and years to come.”
The streaming service may be losing revenue since in 2017, they tweeted, “Love is sharing a password,” but are now trying to eliminate password sharing for free.