Netflix was trying to crack password sharing for over a decade. But over the past year, and more strongly this week, the company has given strong signs that the party is almost over. Instead of indiscriminately curtailing this beloved freedom, however, Netflix could make some basic changes to reduce free users without neglecting longtime customers who just want to help out a friend.
In a letter to shareholders on Tuesday, the streaming giant said it had a net loss of about 200,000 subscribers this quarter, from 221,840,000 to 221,640,000. And Netflix predicts those numbers will continue to decline to roughly 219,640,000 in second quarter of 2022 The company estimates there are more than 100 million additional households, including more than 30 million in the U.S. and Canada, that are opting out of paid bills.
Shares of Netflix tumbled on Wednesday morning, and the company is clearly in sorting mode.
“I feel like Netflix is in crisis response mode and swinging a big pendulum in one direction, but they haven’t given consumers the tools they need to deal with it first,” said David Kennedy, chief executive of the consultancy TrustedSec incident response. “Even just warnings saying ‘this doesn’t look like you’ could be a better approach than taking a hard line against shared accounts.”
The shareholder letter said Netflix’s “relatively high household penetration — when it includes the large number of households sharing accounts — combined with competition creates headwinds for revenue growth” and that it plans to get back on track “through improvements to our service and more effectively monetize sharing across multiple households.”
One major thing Netflix can do to limit the number of people using shared accounts is to add a list in the settings of all the devices the account is active on, with the ability to choose which ones to keep and which ones to cut. That way, the account owner can easily trim down the list — opt out of devices they don’t recognize and Roku in the Airbnb they stayed at last year. Netflix currently only provides a log of the devices that have recently used the account and the option to log out of each device at once.
Of course, turning off every device connected to your Netflix account is a great way to clean up and start fresh. It’s also difficult to get to grips with and unlikely to be an attractive option for most Netflix users. That’s why giving users the ability to choose which devices stay connected is an easy way to reduce the 100 million moochers to something more reasonable.
