Netflix: Will Password-Sharing Policy Backfire?

When they were the only kid on the block, Netflix didn’t exactly care that you shared your password with a buddy so you could both watch your favorite streamer content. Before the company said that sharing passwords was encouraged as it didn’t ultimately hurt their product. Now, their tune has changed and they intend to implement a fee for anyone who uses their account outside their home, a move that will surely alienate their subscribers.

First off, Netflix does have a ton of great content. Unfortunately for them, they painted themselves into a corner when it comes to subscriber retention. Netflix has always released its content with the entire season airing day-1. The streaming giant basically invented binge-watching television shows. Fast forward to every other streamer entering the game and now each service has steered heavily into weekly releases. Most will debut 2-3 episodes on day-1 to peak people’s interest but still tend to release one per week.

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Right there is Netflix’s biggest downfall. Unlike most streamers, if a show has 8-12 episodes they’ll wrap up in 2-3 months. Not only do other streamers have more reason to stay subscribed for longer periods, but they’re at a much lower rate. Netflix has a multi-device plan right now that’s up to $20/month. What’s more likely to happen? Most streamers you’re going to pay $9.99/mo for your old favorite shows, your 2-3 original content shows, and some movies over multiple months? Netflix now that it’s so costly will probably have people stockpiling their favorite shows/movies from the streamer, subscribing for a month to binge, then canceling. At a much lower price, people typically won’t care about keeping their subscription even if they’re not getting original content right away. Every gym owner knows that people will pay for something they don’t use as much as long as it’s the right price.

It’s understandable that streaming has become way more competitive in today’s market. However, Netflix isn’t the only player on the block putting out quality content. Even HBO as a “premium channel” had to create subscription tiers. This was a move designed to match the market. Netflix on the other hand keeps bumping its price assuming they’re the top dog. Look, everyone loves Stranger Things, but if you don’t think people will quickly drop it to watch Obi-Wan, you’re nuts.

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Netflix is playing a dangerous game. They made it known that password sharing wasn’t an issue for them. Now that they’ve gone out of their way to compete in today’s market and spread resources so thin between content and gaming, users are paying the price. It’s time to rip the band-aid off Netflix and start releasing weekly content to maintain subscribers. Jacking up your prices and charging fees is a great way to have mass-cancellation of your services.