Netflix will charge for sharing accounts: 100 million households concerned – La

This is news that will not please many families: Netflix will ban free account sharing, the practice of allowing someone outside the home to create a profile on a loved one’s account, and benefit from it at home, free of charge. The impact of this decision is enormous: account sharing is a very widespread, even generalized practice, since the streamer indicates that it allows more than 100 million households worldwide not to pay for access to the platform. Given that Netflix claims 221.6 million subscribers worldwide, account sharing concerns 31% of households that use Netflix! Netflix loses subscribers for the first time in more than 10 years, the action collapses on the Netflix stock market under pressure after the loss of 200,000 subscribers in the 1st quarter The shortfall is real for Netflix. Especially since in recent quarters, its growth has slowed. The peak of users seems to have been reached and exceeded in the United States and Canada, its domestic markets, and growth is slowing down in Europe. In the first quarter of 2022, for the first time in 10 years, Netflix even lost subscribers, 200,000 exactly. Admittedly, this fall is strongly linked to the war in Ukraine, which led Netflix to withdraw from Russia and therefore to give up 700,000 subscribers, which means that the platform would have gained 500,000 subscribers without the conflict. But Russia is rather the tree that hides the forest, because Netflix has also lost 600,000 subscribers in the United States and Canada. Only the Asia zone is growing, with a gain of 1 million subscribers. Following these disappointing results, Netflix shares fell 24% on the stock market, as the markets were expecting a gain of 2.5 million subscribers in total. In other words, Netflix can no longer afford to sit on the lever of subscribers and revenue that account sharing represents. All the more so in such a competitive landscape, with the arrival since 2019 of Disney+, AppleTV+, Paramount+, HBOMax and Peacock in the United States, which are added to Amazon Prime Video and Hulu in the United States, and to Canal+ Series, OCS and Salto in France. All are very serious competitors, with strong ambitions. Towards a surplus of a few euros per additional “sub-account”? How, then, to monetize this pool of 100 million households? Netflix seems not to choose the hard option, which is to ban account sharing outright and force such users to pay for a subscription. A relevant decision: many of these users are students or modest families, who would probably neither have the means nor the desire to pay a full subscription, even the lowest at 8.99 euros per month. Salvation will therefore perhaps come from overcharging. Since the beginning of March, Netflix has launched tests in South American countries (Chile, Costa Rica and Peru for now) to charge its customers for adding additional profiles to their account. But this surplus makes it possible to transform what was until now only a simple profile in addition, into a real sub-account. The principle: Standard (13.99 euros per month) and Premium (17.99 euros per month) subscribers can add up to two “sub-accounts” to their main account. The difference with a simple additional profile? Each sub-account has its own username and password, which means that the owner of the main account does not have access to it. If they decide to pay for their account themselves or the primary user no longer wishes to pay for the sub-accounts, secondary users can then transfer their list, viewing history, and personalized recommendations to their new account. To determine if an account is shared between multiple households, Netflix uses IP address and device identifiers. Thus, it is not possible to share your password with someone located outside the home because, thanks to the identifiers of devices and the IP address, Netflix will be able to understand that it is in fact different users. The streaming giant plans to generalize this system in its main markets within a year. It now remains to set the value of the additional cost: in Chile as in Costa Rica, users pay the equivalent of 2.70 euros per additional sub-account. In Peru, Netflix has set it at 1.90 euros. Cheaper subscriptions and video games as avenues for diversification Faced with a breakdown in sustainable growth – a loss of 2 million subscribers is expected in the second quarter – and fierce competition, Netflix could also end its policy of incessant increase subscription costs, which is only sustainable in times of growth and hegemony over competition. During a conference call with analysts, Reed Hastings, the co-CEO of Netflix, revealed that the platform is considering the idea of ​​​​offering new cheaper subscriptions, with advertising, in 2023 or 2024. real surprise: until now, Netflix had always refused the idea of ​​integrating advertising into its offer because it positioned itself as a break with traditional television, largely financed by advertising revenue. But Netflix, which offers some of the most expensive subscriptions on the market (8.99 euros for the basic formula, 13.49 euros for the standard formula, 17.99 euros for the premium formula), needs to diversify its sources of income. . “Consider us completely open to the idea of ​​offering even lower prices with advertising to give a new choice to the consumer,” the executive said. This mixed model, half-subscription, half-advertising, had hitherto been adopted by market challengers. The latest to arrive in the United States, Peacock (the giant NBC Universal’s streaming service), chose it to try to find a place on the market more quickly, by offering an offer at 4.99 dollars per month giving access to all content on its platform, but with ads. Finally, Netflix has also entered the world of video games, which could increase the time spent on the platform and constitute a loss leader for taking out a subscription. The platform has already been offering a few games on its service since last November, including some inspired by the universe of its great success, the series Stranger Things. In September, she bought her first video game studio, Night School Studio, a Californian startup. Sylvain Rolland 20 Apr 2022, 11:06