Netflix, long known as the biggest household name in streaming video service, is making big headlines this week with suggestions that it might change how it enforces long-standing user policies.
Catie Keck at The Verge writes that Netflix may be considering how to “gently enforce” rules preventing people from sharing accounts across multiple households.
For context, while Netflix is not experiencing a sharp drop in active users like Facebook did last month, its subscriber growth does seem to be decreasing.
“Netflix added 8.28 million global paid net subscribers over the fourth quarter, compared to analysts’ expectations of adding 8.19 million,” wrote Max Chen Jan. 21, detailing new Netflix numbers coming out at the time. “However, that was still fewer than the 8.5 million subscribers Netflix added in Q4 2020, and the company’s outlook was worse. Looking ahead, Netflix projected another 2.5 million subscribers for the first quarter of 2022, or well below the 3.98 million added in Q1 2021. In comparison, analysts anticipated 6.93 million additional subscribers for the first quarter, according to StreetAccount. Netflix attributed the slowing subscriber growth to increased competition from other online streaming choices, backpedaling on previous statements that companies like Apple and Disney would not materially affect growth.”
All of this may result in Netflix going, as Keck writes, “full hall monitor” on its user base.
Keck points out that this could earn the company some demerits among loyal users, so Netflix will have to tread carefully.
“It’s worth bearing in mind that Netflix is still calling this a ‘test’ for now,” Keck writes. “Netflix hasn’t fully pulled the rug out from underneath those of us lucky enough to have an ex or grandparent who doesn’t mind sharing their password — and it’s possible Netflix will land on some alternative strategy over booting us from the accounts of people outside of our own households. Bringing the hammer down on shared accounts does risk pushing away its own users, which is not ideal for any streamer competing for attention right now. But at the same time, password crackdowns have long seemed like an assured outcome in streaming. … the current streaming dustup shakes out, its users themselves who’ll be paying the tab for their streaming diet.”
Look for more on these changes at a company known among the top FAANG U.S. tech stocks.
